Casino Journal Reports Record Revenue Increases
LAS VEGAS, Nov. 16 /PRNewswire/ -- Casino Journal Publishing Group, Inc. (OTC Bulletin Board: CJPG - news) today announced 3rd quarter and nine month results for fiscal 1998. Revenues in the 3rd quarter ended September 30, 1998 rose 25% to $2,188,660 versus $1,754,633 in the 3rd quarter ended September 30, 1997. In 1997, the Company's top advertising generating Casino Player issue, The Best of Gaming, occurred in the July reporting period (3rd quarter) whereas the 1998 Best of Gaming issue occurred in the June reporting period (2nd quarter), so the quarters cannot be compared on a relative basis.
Advertising revenues rose 12% in 3rd quarter 1998 to $1,482,255 versus $1,321,487. However, the aggressive marketing which Casino Journal Publishing Group has been engaging in during the first 9 months of 1998 has begun to show up in the Company's financial reporting accrual basis for subscription revenue. Subscription revenues for the 3rd quarter 1998 rose 48% to $459, 016 from $309,961. Due to the increase in deferred revenues from subscriptions the Company has generated, subscription revenues are expected to continue increasing at near 50% levels for the next 4 quarters. Other revenue, consisting of consulting revenue, Internet revenues, Casino Marketplace revenues and trade show revenues rose 118% to $265,389 versus $123,185 in the prior quarter.
Nine month revenues for the period ended September 30, 1998 rose 35% to $6,911,663 as compared to $5,093,904 in the nine months ended September 30, 1997. Advertising revenue rose 35% to $4,204,795 versus $3,171,763 in the year ago period. Subscription revenues for the nine month period of 1998 rose 16% to $1,389,657 versus $1,186,339 in the year ago period. However, Deferred Subscription Revenue, or revenue that has been received but not yet booked on the accrual basis has risen to $1,110,026 from $565,257. Most of this deferred revenue will be booked as revenues in the next 12 month period. Other revenues primarily consisting of trade show and consulting revenue rose 80% in the nine months ended September 30, 1998 to $1,317,241 versus $735,802 in the year ago period. This increase is primarily due to the addition of 2 new trade shows in 1998 as well as the merger with Gaming Venture Corp., U.S.A.
In 1998, Casino Journal Publishing Group, Inc. has launched 2 new trade shows and 2 new magazines. The Company's second consumer magazine, Strictly Slots, was launched last week with great fanfare. In the first 9 months of fiscal 1998, the Company has engaged in aggressive marketing activities to increase subscription sales of Casino Player magazine, ahead of the launch of Strictly Slots. These marketing practices have resulted in a 50% increase in cash subscription sales of Casino Player magazine for the first 9 months of the year to $1,426,752 versus $948,431 in the first 9 months of 1997. The Casino Player subscribers are the primary target market for the Company's Strictly Slots launch.
The expenses, both direct and indirect, of launching Strictly Slots, combined with the expenses associated with the ongoing aggressive marketing campaign and the absence of high volume trade shows in the 2nd half of the year, resulted in a net loss for the 3rd quarter ended 1998 of $105,931 or $0.02 per share versus a loss of $35,921 or $0.01 per share in 3rd quarter 1997. In response to the higher than expected response to the Company's marketing campaign, the decision was made to launch Strictly Slots in November of 1998 versus February of 1999. Additional employees in editorial, sales and marketing were hired at the beginning of the 3rd quarter in anticipation of this launch.
Subscription Sales
Company wide subscription sales on a cash basis (total subscriptions received) for the first 10 months of 1998 have totaled $2,104,142 versus $1,320,025 in the first 10 months of 1997. This is directly related to the investment the company has made in marketing during 1998. With the launch of Strictly Slots, the Company is on track to increase cash subscription sales by over 60% this year. This, as well as higher advertising revenues due to the addition of 2 new magazines, will show up in the Company's fiscal 1999 results. Strictly Slots has already received advertising commitments which total 75% of what was projected to be advertising revenues for the magazine for all of fiscal 1999. In addition, the first 3 weeks of marketing subscriptions for Strictly Slots has already resulted in 20% of the Company's projections for subscription sales of the magazine.
Commenting on the first 9 month results of 1998, Casino Journal Chairman and CEO Glenn Fine said, ''It is with a lot of pride that we report the first 9 months results for 1998. The Company is well ahead of every projection we made for this fiscal year and next year. We expected revenues for all of 1998 to approach $8 million. Instead, we now expect revenues to be very close to $9 million. That is versus $7.2 million in 1997 however, there was one additional trade show in 1997 than we will have in 1998 due to the American Gaming, Lodging and Leisure Summit being in January of 1999. Our top publication, Casino Player magazine has been generating subscription and advertising growth which is well above our expectations. Even Company wide newsletter sales are up 25% for the year when we only expected 10% growth. While our growth has been dramatic, it has not come without impacting our profit margins. Increased staffing, increased production, printing and postage costs have all occurred due to our marketing practices and early launch of Strictly Slots. This investment has been well worth it as shown by our results being above expectations and our deferred revenue increase which is finally beginning to show up in our quarterly results. While our revenue growth will be dramatic at 25% this year, we expect the same type of revenue growth or higher next year. This growth has been achieved due to the quality of our employees, our customers and the support of our shareholders. We hope to reward all of them in the future.''
Casino Journal Publishing Group, Inc. publishes Casino Player, the leading consumer magazine for the gaming industry with total circulation of over 400,000 a month; Strictly Slots, the newest consumer magazine for slot players and the gaming industry; Casino Journal, the leading trade magazine for the gaming industry; Nevada Hospitality, the official magazine of the Nevada Hotel/Motel & Restaurant Association; The National Gaming Summary, The Gaming Industry Weekly Report, The Gaming Industry Daily Report, The Gaming Sector....Yesterday, Today and Tomorrow, The Daily Lodging Report and that Atlantic City Insider newsletters.
In addition, the Company produces The American Gaming, Lodging and Leisure Summit in conjunction with Bear Stearns & Co. and the leading Nevada law firm of Lionel Sawyer & Collins; The Southern Gaming Summit with the Mississippi Casino Operators Association; The Atlantic City Chamber of Commerce Business Expo and UNLV's Casino Ops trade shows.
This press release contains forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to the following risks and uncertainties which could cause actual events to differ from anticipated events: competition, economic fluctuations, a change in consumer tastes and competition within the gaming industry. Additional risk factors can be found in the Company's filings with the Securities and Exchange Commission.
Casino Journal Publishing Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues $2,186,660 $1,754,833 $6,911,693 $5,093,904
Direct costs 1,237,109 1,163,180 3,463,251 2,840,208
Gross Profit 949,551 591,453 3,448,442 2,253,696
General and administrative
expenses 1,172,573 630,060 3,445,011 2,098,535
Income (loss) from
operations (223,022) (36,607) 3,431 155,161
Other income (expenses) (4,909) 2,686 25,301 19,191
Income (loss) before income
taxes (227,931) (35,921) 28,732 174,352
Income taxes (benefit) (122,000) -- 6,000 --
Net income (loss) $(105,931) $(35,921) $22,732 $174,352
Basic and diluted income
(loss) per share $(.02) -- $.01 --
Pro forma income data
Income (loss) before income
taxes, as reported -- $(35,921) -- $174,352
Pro forma income taxes -- -- -- 70,000
Pro forma net income (loss) -- $(35,921) -- $104,352
Basic and diluted income (loss)
per share (pro forma) -- $ (.01) -- $ .03
Shares used in the calculation of
income (loss) per share 4,919,868 3,000,000 4,164,289 3,000,000
SOURCE: Casino Journal Publishing Group, Inc.
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