This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Asia Entertainment & Resources Ltd. Announces Second Quarter And First Half 2012 Financial Results

Stocks in this article: AERL

About Asia Entertainment & Resources Ltd.

AERL is a holding company which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, and is entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms. AERL's VIP room gaming promoters currently participate in the promotion of three major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world. One VIP gaming facility is located in the luxury 5-star hotel, the Star World Hotel & Casino in downtown Macau, which is operated by Galaxy Casino, S.A. Another VIP gaming room is located in the Galaxy Resort Macau in Cotai, which is operated by Galaxy Casino, S.A. The third VIP gaming room is located at the Venetian Macao-Resort-Hotel in Cotai.

Forward-Looking Statements

This press release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of AERL's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The gaming industry is characterized by an element of chance. Theoretical win rates for AERL's VIP room gaming promoters' VIP gaming room operations depend on a variety of factors, some beyond their control. In addition to the element of chance, theoretical win rates are also affected by other factors, including gaming patrons' skill and experience, the mix of games played, the financial resources of gaming patrons, the spread of table limits, the volume of bets placed by AERL's VIP room gaming promoters' gaming patrons and the amount of time gaming patrons spend on gambling — thus VIP gaming rooms' actual win rates may differ greatly over short time periods, such as from quarter to quarter, and could cause their quarterly results to be volatile. These factors, alone or in combination, have the potential to negatively impact the VIP gaming rooms' win rates. Investors and potential investors should consult all of the information set forth herein and should also refer to the risk factors set forth in AERL's Annual Report on Form 20-F filed on March 16, 2012, and other reports filed or to be filed from time-to-time with the Securities and Exchange Commission.

 
 
ASIA ENTERTAINMENT & RESOURCES LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
       
For the Three Months Ended June 30, 2012

For the Three Months Ended June 30, 2011

For the Six Months Ended June 30, 2012 For the Six Months Ended June 30, 2011
Revenue from VIP Gaming Operations $

58,531,067

 

$ 55,202,878   $

125,849,178

 

$ 106,456,097  
 
Expenses
 
- Commission to Agents 38,095,211 33,252,021 81,623,353 64,282,976
- Selling, General and Administrative Expenses 4,367,472 4,247,329 9,211,287 7,539,614
 
- Special Rolling Tax 468,249 433,003 1,006,662 840,543
- Amortization of Intangible Assets   1,268,319     1,265,657     2,536,835     2,529,726  
Total Expenses   44,199,251     39,198,010     94,378,137     75,192,859  
Operating income before change in fair value of contingent consideration 14,331,816 16,004,868 31,471,041 31,263,238
Change in Fair Value of Contingent Consideration for the Acquisition of King's Gaming   7,705,352     5,142,653     5,894,431     2,770,683  
Net Income   22,037,168     21,147,521     37,365,472     34,033,921  
 
Comprehensive Income
Foreign Currency
- Translation Adjustment   183,054     (7,611 )   507,895     (102,760 )
Total Comprehensive Income $ 22,220,222   $ 21,139,910   $ 37,873,367   $ 33,931,161  
 
Net Income Per Share
Basic $ 0.52   $ 0.54   $ 0.88   $ 0.93  
Diluted $ 0.52   $ 0.54   $ 0.88   $ 0.91  
Weighted Average Shares Outstanding
Basic   42,466,627     38,824,025     42,472,046     36,730,655  
Diluted   42,467,083     39,153,220     42,580,233     37,250,775  
 
 
ASIA ENTERTAINMENT & RESOURCES LTD. CONSOLIDATED BALANCE SHEETS
     
June 30, 2012 December 31, 2011
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents

$

41,292,569

 

$ 16,718,565
Accounts Receivable, Net 1,513,947 1,240,142
Markers Receivable 225,122,473 240,131,089
Prepaid Expenses and Other Assets   127,747     292,559  
Total Current Assets 268,056,736 258,382,355
 
Intangible Assets (net of accumulated amortization of $8,459,042 and $5,902,419 at June 30, 2012 and December 31, 2011, respectively) 52,617,269 54,983,937
Goodwill 15,038,782 14,992,009
Property and Equipment (net of accumulated depreciation of $7,730 and $1,101 at June 30, 2012 and December 31, 2011, respectively) 20,313 26,855
Other Assets   21,575     22,158  
TOTAL ASSETS $ 335,754,675   $ 328,407,314  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Lines of Credit Payable $ 40,355,721 $ 46,270,563
Accrued Expenses 11,719,132 16,157,439
Payable-King's Gaming Acquisition, current portion 11,116,885 12,057,600
Loan Payable, Shareholders, current   4,561,746     2,641,619  
Total Current Liabilities 67,753,484 77,127,221
 
Loan Payable, Shareholders 60,000,000 60,000,000
Long-term Payable-King's Gaming Acquisition, net of current portion   15,589,311     32,492,985  
Total Liabilities   143,342,795     169,620,206  
 
COMMITMENTS AND CONTINGENCIES
 
SHAREHOLDERS' EQUITY
Preferred Shares, $0.0001 par value Authorized 1,150,000 shares; none issued - -
Ordinary Shares, $0.0001 par value Authorized 200,000,000 shares; issued and outstanding 42,451,164 at June 30, 2012 and 38,804,064 at December 31, 2011 4,246 3,881
Additional Paid-in Capital 73,837,277 52,581,098
Retained Earnings 118,168,630 106,308,297
Accumulated Comprehensive Income (Loss)   401,727     (106,168 )
Total Shareholders' Equity   192,411,880     158,787,108  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 335,754,675   $ 328,407,314  

Cash Flow Information

For the Six Months Ended June 30,

(Unaudited)

       
2012 2011
Net cash provided by (used in) operating activities $ 38,905,094 $ (9,506,546)
Net cash provided by (used in) financing activities $ (14,733,107) $ 3,222,754
Net increase (decrease) in cash and cash equivalents $ 24,171,987   $ (6,283,792)
  • Condensed from financial statements

Non-GAAP Financial Measure

Our calculation of non-GAAP income (operating income before amortization of intangible assets and change in fair value of contingent consideration) and Non-GAAP earnings per share (“EPS”) for the three and six months ended June 30, 2012 and 2011, differs from EPS based on net income because it does not include amortization of intangible assets and change in fair value of contingent consideration. We use this information internally in evaluating our operations and believe this information is important to investors because it provides a more complete picture of our operations for the entire period and is more accurately comparable to the prior-year period. Notwithstanding the foregoing, however, Non-GAAP income and EPS should not be considered an alternative to, or more meaningful than, net income and EPS as determined in accordance with GAAP. The following is a reconciliation of our unaudited net income to Non-GAAP income and GAAP EPS to our Non-GAAP EPS:

 

For the Three Months Ended June 30, 2012

 

For the Three Months Ended June 30, 2011

 
Net Income attributable to ordinary shareholders $22,037,168 $21,147,521
 
Amortization of intangible assets 1,268,319 1,265,657
 
Change in fair value of contingent consideration (7,705,352) (5,142,653)
 
Non-GAAP income (before amortization of intangible assets and change in fair value of contingent consideration) $15,600,135 $17,270,525
 

For the Three Months Ended June 30, 2012

 

For the Three Months Ended June 30, 2011

Basic  

Fully Diluted

Basic  

Fully Diluted

 
Earnings per share attributable to ordinary shareholders $ 0.52 $ 0.52 $ 0.54 $ 0.54
 
Amortization of intangible assets 0.03 0.03 0.03 0.03
 
Change in fair value of contingent consideration   (0.18 )   (0.18 )   (0.13 )   (0.13 )
 
Non-GAAP Earnings per share (before amortization of intangible assets and change in fair value of contingent consideration) $ 0.37   $ 0.37   $ 0.44   $ 0.44  
 

For the Six Months Ended June 30, 2012

 

For the Six Months Ended June 30, 2011

 
Net Income attributable to ordinary shareholders $ 37,365,472 $ 34,033,921
 
Amortization of intangible assets 2,536,835 2,529,726
 
Change in fair value of contingent consideration   (5,894,431 )   (2,770,683 )
 
Non-GAAP income (before amortization of intangible assets and change in fair value of contingent consideration) $ 34,007,876   $ 33,792,964  
 

For the Six Months Ended June 30, 2012

 

For the Six Months Ended June 30, 2011

Basic  

Fully Diluted

Basic  

Fully Diluted

 
Earnings per share attributable to ordinary shareholders $ 0.88 $ 0.88 $ 0.93 $ 0.91
 
Amortization of intangible assets 0.06 0.06 0.07 0.07
 
Change in fair value of contingent consideration   (0.14 )   (0.14 )   (0.08 )   (0.07 )
 
Non-GAAP Earnings per share (before amortization of intangible assets and change in fair value of contingent consideration) $ 0.80   $ 0.80   $ 0.92   $ 0.91  




4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs