It was announced last Wednesday that World Poker Tour Enterprises (WPTE), which owns the popular World Poker Tour (WPT) and the up-and-coming subscription online poker site ClubWPT.com, enjoyed its second consecutive profitable quarter with the close of Q2 2009.
While the revenues for the second quarter of 2009 were behind those during the same period in 2008 – from $5.1 million to $4.6 million – WPTE was able to make a profit due to the lower production costs of Season VII of the WPT broadcasts compared to the costs had been previously. In addition, international distribution of WPT broadcasts and the continued growth of ClubWPT.com has been able to push the organization into the black. Overall, income from continuing operations was $370,000 in the second quarter of 2009, compared to a $3.3 million loss in the second quarter of 2008
WPT Enterprises has been able to work itself into profitability from recognizing parts of the company that were under-performing. In the first quarter of 2009, WPT Enterprises cut away WPT China, which had been a drain on its bottom line. For example, the discontinuation of WPT China in the first quarter of 2009 helped WPTE only take a $95,000 loss on the venture in the second quarter versus the $581,000 WPT China lost during the second quarter of 2008.
Operating its own online poker room, wptonline.com, also was one of the appendages cut from the company. WPT Enterprises paid a $1 million charge for the discontinuation of wptonline.com and has seen profits soar with the subscription-based ClubWPT.com. The increase was driven by the Fox Sports Network broadcasts of ClubWPT, which offered online players a chance to win their way into a televised tournament with a $10,000 prize. In fact, the television offerings of WPTE had gross profit margins of 53% in the first two quarters of 2009, compared to just 39% during the same period in 2008.
“We have completed our second successful quarter, demonstrating the significant progress we have made in our turnaround efforts to position the company for future profitability,” Steve Lipscomb, President and CEO of WPTE, stated during the Second Quarter report. “Fox Sports Net completed the initial airing of 26 all-new episodes of Season Seven of the World Poker Tour television series across the U.S. in July as a part of FSN’s Sunday sports block. We also filmed our first Season Eight tour stop in high definition and FSN will air Season Eight of the World Poker Tour television series beginning in late 2009 or early 2010.”
The expectations for the third quarter of 2009 are for continued profitability, albeit on the lower end of the spectrum. WPT Enterprises revenues are expected to be in the range of $3.2 to $3.4 million and, with the lower production and administrative costs, expect to turn a small profit from continuing operations. If Season VII episodes are delivered to foreign markets ahead of schedule, then revenues and profits from the fourth quarter will be shifted into the third quarter of 2009 and could increase profitability further.
The recent success has shown elsewhere on the WPTE scoreboard. The company was able to avoid having its stock offerings de-listed by bringing the price above $1 in June. Currently the WPTE’s stock is trading on the NASDAQ at $1.36, nearly double what it was only three months ago.
