Press Release Source: Littlefield Corporation
Littlefield Corporation Announces Ninth Consecutive Quarter of Substantially Improved Earnings
Thursday July 27, 2:12 pm ET
AUSTIN, Texas--(BUSINESS WIRE)--July 27, 2006--Littlefield Corporation (OTCBB:LTFD - News) today announced earnings for the second quarter of 2006. This was a very good quarter for the Company.
Results were substantially improved when compared to Q2-2005. This is the ninth consecutive quarter of substantially improved operating earnings.
The Q2-2006 earnings include approximately $77,000 of noteworthy, non cash expenses for such things as compensation expense related to stock options and the write off of bad debt for both Entertainment and Hospitality. Legal expenses were $47,782 for the quarter -- a "normal" level of legal expenses.
The Q2-2005 earnings included approximately $670,000 of nonrecurring income items including the recognition of income associated with the payment of a promissory note and deferred compensation. In addition, the Company expensed bad debt of approximately $130,000 during the same quarter.
Highlights for the quarter are as follows:
1. Net income for the Company increased by 28% from $474,458
to $606,867.
Stripping net income for the quarters of the items noted
above, the comparison is even more impressive with net
income increasing from an operating loss of ($63,737) in
Q2-2005 to operating income of $683,731 or an increase of
$747,468 in Q2-2006.
2. Hospitality net income was $236,325 for the quarter -- the
most profitable quarter in the history of the Company's
ownership -- an increase of $190,084 or 411%.
Premiere Tents & Events Q2-2006 net income (gross margin)
was up 990% or $182,052 to $200,438.
Word of Mouth Q2-2006 net income (gross margin) was up 82%
or $53,146.
3. Entertainment (bingo) net income for Q2-2006 increased
$361,813 or 77% to $833,318. Of particular note was the
increase in Q2-2006 Texas bingo net income (gross margin)
of 141% or $316,535 and 104% or $558,835 YTD. Texas bingo,
the Company's revenue and earnings leader, is doing very
well.
4. Earnings per share for the quarter increased from
$0.0553 to $0.0561. Stripped of the noteworthy, non-cash
and non-recurring expenses identified above, earnings per
share for Q2-2006 increased from ($0.0074), a loss, to
$0.0632.
Earnings per share for the YTD 2006 increased to $0.1069
from $0.0701 in 2005 -- an increase of 52%.
Please recall the recent issuance of a 20% stock dividend
in the interim period which has impacted the number of
shares outstanding.
5. Revenue was up by 21% or $617,330 with Hospitality
increasing by 25% or $320,923 to $1,622,036 and
Entertainment increasing by 18% or $303,910 to $1,996,000.
Hospitality revenue is up 20% 2006 YTD and Entertainment
is up 18% YTD 2006.
Of particular note is the 41% increase in Q2-2006 quarterly
revenue for Premiere Tents & Events.
The following report is based upon accounts that have been reviewed by the Company's auditors and the Company's Audit Committee of the Board of Directors. The auditors made an extraordinary effort to complete their review prior to this earnings release. In the future, the Company will endeavor to report only "reviewed" earnings information which will necessitate changing the anticipated reporting date from the third Wednesday of the month following the end of the quarter to the fourth Wednesday.
REVENUE:
--------
Q2-2006 Q2-2005 Variance % Change
------- ------- -------- --------
LTFD Corporation $3,614,848 $2,997,518 $617,330 21%
Entertainment 1,996,000 1,692,090 303,910 18%
Hospitality 1,622,036 1,301,113 320,923 25%
Revenue has surpassed $3,000,000 for the quarter and is almost $2,000,000 for Entertainment. Hospitality has continued its recent record of meaningful double-digit revenue gains for the last five quarters. Texas bingo and Premiere Tent & Events have been particularly strong contributors.
The trend of revenue increases has been as follows:
TREND OF
REVENUE Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2-
INCREASES 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006
---------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
LTFD Corp. (6%) (2%) 1% 9% 11% 10% 20% 17% 17% 21%
Entertainment (6%) 1% 15% 11% 10% 5% (1%) 14% 21% 18%
Hospitality (6%) (8%) (29%) 6% 5% 19% 90% 19% 10% 25%
The pattern of revenue increases which first became evident in Q4-2004 (absent only Entertainment in Q3-2005) continues to assert itself with another quarter of significant double-digit revenue increases.
NET INCOME
----------
Q2-2006 Q2-2005 Variance % Change
------- ------- -------- ---------
LTFD Corporation $606,867 $474,458 $132,409 28%
Entertainment 833,318 471,505 361,813 77%
Hospitality 236,325 46,241 190,084 411%
Net income was up by 28% which continues a nice trend from Q1-2006 when net income increased by 340% or $434,403. YTD net income is therefore up by 92% or $554,282 with Entertainment YTD net income up by a solid 64% and Hospitality net income YTD up by $184,354. This is a very solid performance for the first half of the year.
It is worthy of comment that Word of Mouth increased its Q2-2006 net income by 82% on only a 5% increase in revenue implying that the underlying revenue was managed at a greater profit margin during the quarter. We may be held hostage to the market to increase revenue but in many ways it is the Company's own efforts that improves profit margins.
Premiere similarly showed a 990% increase in net income on a 32% increase in revenue. This indicates that when Hospitality gets to a higher level of revenue it has been able to generate an increasing margin of profit as its internal overhead expense is amortized over a broader revenue base. While we have always projected that to be the case, this quarter proves that assertion.
Disregarding the charges noted earlier, the Company's net income for Q2-2006 was up by $747,468 and $1,161,868 YTD. Again, this is a very solid start for 2006.
Please note that the discussion of net income for Entertainment and Hospitality above more closely approximates "gross margin" as applied to those segments.
CORPORATE OVERHEAD:
-------------------
2006 2005 Variance % Change
-------- -------- ---------- --------
2nd QUARTER $333,985 $657,110 $323,125 49%
YTD 608,418 1,017,365 408,947 40%
The improvement in Corporate Overhead expenses continues to be driven by dramatically lower levels of legal expenses. Corporate Overhead in this discussion does not include depreciation of $26,247 and $21,783 of expenses related to stock options. This is consistent with past presentation of this information.
BASIC EARNINGS PER SHARE
------------------------
2006 2005 Variance % Change
---- ---- -------- --------
Q2 Earnings $606,867 $474,458 $132,409 28%
YTD Earnings $1,156,035 $601,753 $554,282 92%
Shares Outstanding 10,818,769 8,583,509 2,235,260 26%
Quarterly EPS $0.0561 $0.0553 $0.0008 1%
YTD EPS $0.1069 $0.0701 $0.0367 52%
Earnings per share for Q2-2006 are up by 1% in spite of a 24% increase in the number of shares outstanding over the last year. The increase in shares outstanding is primarily due to the recent 20% stock dividend.
Earnings per share YTD are up 52% and continue the trend initiated by the first quarter performance.
Jeffrey L. Minch, President and Chief Executive Officer of Littlefield Corporation, offered the following comments:
"The results for the Quarter were good, very good! This is a
very good start for 2006 and one that we believe will continue
for the rest of the year.
The improvements in Texas bingo -- Q2-2006 net income up by
141% and YTD up by 104% -- are particularly gratifying as they
represent the collective impact of many, many small
improvements and presage the results of the continuing gradual
improvement of all of our Texas bingo halls. In the past I
have at times described these kind of improvements as
'structural' in that they are based upon a sound foundation
and should continue at a sustainable rate. There is a very
high probability that these changes are, in fact, structural.
It is also important to note that Texas bingo is the core of
the Company's business and the health of this unit indicates
the health of the Company.
Hospitality had a fabulous quarter with a 411% increase in
earnings! Premiere Tents & Events led the way with a 41%
increase in revenue and a 990% increase in earnings. Word of
Mouth net income increased by 82%. Hospitality contributed
$236,325 to the Company's net income. This is a significant
contribution.
Thanks to all of our loyal staff who have worked so diligently
to produce a great second quarter on the heels of a great
first quarter. The future is bright and the promise of
repetition is high! Thank you!"
Earnings will be discussed in a conference call on Friday, July 28, 2006, at 11:00 AM CDT. Interested parties may participate by calling 877-407-6177 and requesting the Littlefield Corporation Second Quarter 2006 Earnings Conference Call. |
