SOURCE: Global Casinos, Inc.

October 13, 2008 08:00 ET

Global Casinos Announces 120% Increase in Fourth Quarter Operating Income on 96% Improvement in Revenue

Existing Casino Revenue up 19% Versus Year-Ago Quarter

BOULDER, CO--(Marketwire - October 13, 2008) - Global Casinos, Inc. (OTCBB: GBCS) today announced financial results for its fourth quarter and fiscal year ended June 30, 2008.

Fourth quarter revenue increased 96% to $1,688,000 from $860,000 in the same period a year ago. The increase is attributable to the Company's March 2008 acquisition of the Doc Holiday Casino in Central City, as well as improved quarter-over-quarter results at its flagship Bull Durham Casino in Blackhawk. Fourth quarter income from operations increased 120% to $95,000 from $43,000 in the year-ago fourth quarter. Net income increased to $49,000 from $12,000 in the fourth quarter last year, while net income attributable to common stockholders was $35,000, or $0.01 per diluted share, versus $12,000, or $0.00 per diluted share, in the fourth quarter a year ago.

Clifford L. Neuman, president, said, "Our aggressive efforts to strengthen Global's core casino operations resulted in a 19% quarter-over-quarter increase in organic revenue during the fourth period. We attribute this increase to the strength of our casino management software platform, as well as our employees' attention to customer service and the enhancements we have made to our targeted advertising and marketing programs. Collectively, these efforts helped fuel a marked improvement in our customer retention levels."

"The momentum Bull Durham carried at the end of the fourth quarter has continued into the new year," Neuman added. "In spite of challenging economic conditions, we currently expect to achieve a first quarter revenue increase at Bull Durham of between 10% and 12% versus the same quarter last year."

Neuman said management is now focused on improving the financial and operational performance of Global's recently acquired Doc Holiday property. "Like many local and national casinos, Doc Holiday has experienced declining revenue trends in recent quarters, and this will likely continue into the first fiscal period of 2009. We are working to combat this situation with tighter cost controls and targeted marketing programs. Doug James, our president and general manager of casino operations, spearheaded the successful growth initiatives at Bull Durham, and will now oversee the implementation of similar marketing and customer loyalty programs at Doc Holiday. Given our operational team's track record, we are optimistic that Fiscal 2009 will be a year of continued improvement at both of our casino properties."

Neuman said potential passage of a Colorado ballot initiative could further enhance Global's prospects for long-term financial growth. "Proposed changes to Colorado's gaming laws could significantly improve the economic prospects Colorado's casino industry. If passed, Amendment 50 would allow local gaming communities to increase wager limits to $100 from the current $5 limit. In addition, casinos could add roulette and craps to their gaming portfolios, and expand their hours of operation. We believe that the increase in wager limits will attract additional local and out-of-state customers, who normally would go to jurisdictions with higher wager limits. At present, this amendment is leading in the polls and has received widespread support from local media, business organizations and educational institutions. Given the financial benefits this amendment would bring to Colorado's community colleges and three gaming towns, we are optimistic it will pass in November."

Full-year 2008 Highlights

For the full fiscal year ended June 30, revenue increased 23% to $4,402,000 from $3,578,000 in fiscal 2007. Income from operations was $238,000 versus $245,000 a year ago. The decline is largely attributable to added expenses associated with the Doc Holiday Casino acquisition. Full-year net income increased to $124,000 from $119,000 in fiscal 2007, while income attributable to common stockholders was $106,000, or $0.02 per diluted share, versus $119,000, or $0.02 per diluted share last year.

About Global Casinos, Inc.

Global Casinos, Inc. owns and operates the Bull Durham Saloon and Casino and Doc Holliday Casino, located in Colorado's limited stakes gaming districts of Black Hawk and Central City, respectively.

Safe Harbor Statement

Certain statements in this news release that are not historical facts are forward-looking statements, such as statements relating to anticipated enhancements in the Company's financial performance, and future development or expansion activities. Such forward-looking statements involve a number of risks and uncertainties that may significantly affect performance and financial results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, those related to effects of competition, leverage and debt service financing and refinancing efforts, general economic conditions, changes in gaming laws or regulations (including the legalization of gaming in various jurisdictions), risks related to development and construction activities, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-KSB for the year ended June 30, 2008.


                  GLOBAL CASINOS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
            for the three months ended June 30, 2008 and 2007



                                                      2008         2007
                                                  -----------  -----------

Revenues:
  Casino                                          $ 1,731,506  $   894,476
  Promotional allowances                              (43,400)     (34,525)
                                                  -----------  -----------
    Net Revenues                                    1,688,106      859,951

Expenses:
  Casino operations                                 1,503,255      770,134
  Operating, general, and administrative               90,175       46,858
                                                  -----------  -----------
                                                    1,593,430      816,992

Income from operations                                 94,676       42,959

Other income (expense):
  Interest                                            (44,398)     (20,866)
  Equity in earnings of Global Gaming
   Technologies                                        (1,562)     (10,209)
                                                  -----------  -----------

Income before provision for income taxes               48,716       11,884
  Provision for income taxes                                -            -
                                                  -----------  -----------
Net income                                             48,716       11,884

Series D Preferred dividends                          (14,156)           -
                                                  -----------  -----------
Net income attributible to common shareholders    $    34,560  $    11,884
                                                  ===========  ===========

Earnings per common share, basic and diluted:     $      0.01  $      0.00
                                                  ===========  ===========




                  GLOBAL CASINOS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                for the years ended June 30, 2008 and 2007

                                                      2008         2007
                                                  -----------  -----------
Revenues:
  Casino                                          $ 4,561,095  $ 3,738,142
  Promotional allowances                             (158,641)    (160,020)
                                                  -----------  -----------
    Net Revenues                                    4,402,454    3,578,122
Expenses:
  Casino operations                                 3,949,039    3,071,360
  Operating, general, and administrative              215,112      261,297
                                                  -----------  -----------
    Total operating expenses                        4,164,151    3,332,657

Income from operations                                238,303      245,465

Other income (expense):
  Interest                                           (105,979)     (93,800)
  Equity in earnings of Global Gaming
   Technologies                                        (8,688)     (30,465)
  Loss on asset disposals                                   -       (2,123)
                                                  -----------  -----------

Income before provision for income taxes              123,636      119,077
  Provision for income taxes                                -            -
                                                  -----------  -----------
Net income                                            123,636      119,077
Series D Preferred dividends                          (17,856)           -
                                                  -----------  -----------
Net income attributable to common shareholders    $   105,780  $   119,077
                                                  ===========  ===========

Earnings per common share:
  Basic                                           $      0.02  $      0.02
                                                  ===========  ===========
  Diluted                                         $      0.02  $      0.02
                                                  ===========  ===========

Weighted average shares outstanding:
  Basic                                             5,836,006    5,158,249
                                                  ===========  ===========
  Diluted                                           5,923,088    5,273,247
                                                  ===========  ===========




                  GLOBAL CASINOS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS


                                                    June 30,     June 30,
                                                      2008         2007
                                                  -----------  -----------

                       ASSETS

Current Assets
  Cash and cash equivalents                       $ 1,163,416  $ 1,563,968
  Accrued gaming income                               219,821       39,273
  Inventory                                            16,469        7,410
  Prepaid expenses and other current assets            92,972       13,606
                                                  -----------  -----------
      Total current assets                          1,492,678    1,624,257

Acquisition escrow deposit                                  -      100,000

Investment in Global Gaming Technologies               60,847       69,535

Land, building and improvements, and equipment:
  Land                                                517,950      517,950
  Building and improvements                         4,121,308    4,110,685
  Equipment                                         3,057,670    2,347,232
                                                  -----------  -----------
    Total land, building and improvements, and
     equipment                                      7,696,928    6,975,867
  Accumulated depreciation                         (3,900,633)  (3,383,760)
                                                  -----------  -----------
  Land, building and improvements, and equipment,
   net                                              3,796,295    3,592,107

Goodwill                                            1,898,496            -

Total assets                                      $ 7,248,316  $ 5,385,899
                                                  ===========  ===========


           LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable, trade                         $    75,196  $    47,226
  Accounts payable, related parties                    68,332       24,850
  Accrued expenses                                    359,461      243,100
  Accrued interest                                      6,390        3,852
  Joint venture obligation                             30,000       40,000
  Current portion of long-term debt                   589,581       52,664
  Other                                               254,105      120,000
                                                  -----------  -----------
      Total current liabilities                     1,383,065      531,692

Long-term debt, less current portion                1,659,411    1,899,647

Commitments and contingencies

Stockholders' equity:
  Preferred stock: 10,000,000 shares authorized
    Series A - no dividends, $2.00 stated value,
     non-voting, 2,000,000 shares authorized,
     200,500 shares issued and outstanding            401,000      401,000
    Series B - 8% cumulative, convertible, $10.00
     stated value, non-voting, 400,000 shares
     authorized, no shares issued and outstanding           -            -
    Series C - 7% cumulative, convertible, $1.20
     stated value, voting 600,000 shares authorized,
     no shares issued and outstanding                       -            -
    Series D - 8% cumulative, convertible, $1.00
     stated value, non-voting, 1,000,000 shares
     authorized, 700,000 shares issued and
     outstanding                                      700,000            -
  Common stock - $0.05 par value; 50,000,000
   shares authorized;
      5,865,215 and 5,202,909 shares issued and
       outstanding at June 30, 2008 and 2007,
       respectively                                   293,261      260,146
  Additional paid-in capital                       14,027,093   13,632,564
  Accumulated (deficit)                           (11,215,514) (11,339,150)
                                                  -----------  -----------
Total equity                                        4,205,840    2,954,560
                                                  -----------  -----------

Total liabilities and stockholders' equity        $ 7,248,316  $ 5,385,899
                                                  ===========  ===========

Contact Information

  • CONTACTS:
    Clifford L. Neuman
    President and CEO
    Global Casinos, Inc.
    303-449-2100

    Geoff High
    Principal
    Pfeiffer High Investor Relations, Inc.
    303-393-7044