February 26, 2007
Bingo.com Announces Fourth Quarter Results
ANGUILLA, B.W.I., February 26, 2007 / Bingo.com, Ltd. (OTC BB: BNGOF), operator of the World’s Largest Bingo Hall, today announced its unaudited financial results for the fourth quarter ended December 31, 2006. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.
“The fourth quarter of 2006 presented many challenges for Bingo.com,” said Tarrnie Williams, the Company’s CEO. “With the passing of the United States Unlawful Internet Gambling Enforcement Act, the Company was left with no choice but to halt its gaming operations and sell its entire United States gaming business to an unrelated third party. This regulatory change significantly impacted Bingo.com’s revenue and therefore its profitability in both this and the first quarter of 2007. In response to this situation, the Company has accelerated its plans to expand its online gaming business in regulated countries throughout the world and expects to complete its preparations for the launch of its online bingo games in the United Kingdom in March 2007, and into other regulated markets later in 2007. We are excited by the opportunity these markets present to Bingo.com and look forward to a return to profitability. “
Bingo.com results of the fourth quarter of 2006 included:
- Receipt of $180,000 towards the total purchase price of $1.2 million for the sale of the US gaming business to be paid over time.
- Total revenue of $103,630, a decrease of $729,913 from the third quarter of 2006.
- Online gaming revenue of $94,780, a decrease of $727,114 from the third quarter of 2006.
- A net loss of $336,727 for the quarter, which includes a provision for doubtful debts of $206,241.
Total revenue for the quarter ended December 31, 2006, decreased to $103,630, a decrease of 84% from revenue of $654,438 for the same period in the prior year and a decrease of 88% from revenue of $833,543 in the third quarter of 2006. Of the $103,630 revenue for the quarter, the online gaming operations provided revenue of $94,780, a decrease of 73% from gaming revenue of $353,348 in the fourth quarter of 2005 and a decrease of 88% from gaming revenue of $821,893 in the third quarter of 2006. This decrease is solely due to the Company selling its US based gaming business, effective October 12, 2006, in response to the United States Unlawful Internet Gambling Enforcement Act of 2006. The advertising revenue for the quarter ended December 31, 2006, was $8,850, a significant decrease from advertising revenue of $301,090 in the fourth quarter of 2005 and a decrease of 24% from advertising revenue of $11,650 in the third quarter of 2006. This decrease is due to management’s decision in early 2006 to suspend the sale of advertising available to third parties in order to increase the number of players in the Bingo.com cash games.
Operating costs before interest, depreciation and amortization expenses were $395,863 in the fourth quarter of 2006, a decrease of 36% over operating costs of $614,802 in the third quarter of 2006. The decrease in operating expenses, particularly marketing expenses, is a result of the Company’s sale of the US gaming business.
The Company has provided $206,241 for doubtful debts. These doubtful debts relate, mostly, to funds held at the First Curaçao International Bank, which has been placed under the control of the Central Bank of Curaçao by the Court of the Netherlands Antilles. The Company has submitted all documents required by the Central Bank of Curacao to release its funds but, due to the uncertainty of collection, the Company has provided for these funds in full. In addition, the Company has provided for the possible inability to collect funds, held with certain payment processors, which have retained these funds in response to the passing of the United States Unlawful Internet Gambling Enforcement Act.
Effective October 12, 2006, the Company, in response to the United States Unlawful Internet Gambling Enforcement Act, sold its United States cash bingo business for $1,200,000, payable by the purchaser at a variable rate over the coming months. The Company will recognize the profit from the sale of the cash bingo business as and when payment is received. During the quarter ended December 31, 2006, the Company collected $180,000 in payment for the cash bingo business.
Net loss for the quarter ended December 31, 2006, amounted to $336,727, a decrease in net income compared to net income of $40,095 for the fourth quarter of 2005, and a decrease in net income compared to net loss of $51,251 in the third quarter of 2006. This increase in net loss is a result of decreased revenue in the quarter and the large provision for doubtful debts.
Bingo.com had cash of $521,203 and working capital of $475,824 at December 31, 2006. This compares to cash of $1,071,088 and working capital of $581,855 at December 31, 2005.
For more information contact:
- Henry Bromley
- (264) 461-2646