Kinbasha Gaming International, Inc (KNBA)

[AsiaInsight]

Kinbasha Announces Milestone Financial Results for Fiscal 2013

Company Reports Net Income of $11.6 Million and Fully Diluted EPS of $0.95 for the Fiscal Year Ended March 31, 2013

HITACHI, JAPAN--(Marketwired - Jul 2, 2013) - Kinbasha Gaming International, Inc. (OTCQX: KNBA), owner and operator of retail pachinko gaming centers in Japan, has filed its annual report on Form 10-K with the SEC and released its financial results for its fiscal year ended March 31, 2013.

Summary of Fiscal Year 2013 Financial Results

Net revenues increased to $93.9 million in fiscal 2013, compared to $91.2 million in fiscal 2012.
Net income improved to $11.6 million in fiscal 2013, compared to a net loss of $6.1 million in fiscal 2012.
Fully diluted earnings per share (EPS) improved to $0.95 in fiscal 2013, compared to a loss of per share of $0.82 in fiscal 2012.

Analysis of Fiscal Year 2013 Financial Results

For the fiscal year ended March 31, 2013, net revenues increased to $93.9 million for the year ended March 31, 2013 from $91.2 million in the year ended March 31, 2012. Net revenues increased due to an improvement in gaming revenues, which increased to $90.6 million in fiscal 2013 from $84.6 million in fiscal 2012. The Company's increase in net gaming revenues was a result of an increase in total wagers with a moderate decrease in pay-outs, which more than offset the decrease resulting from a 5.1% decrease in the yen/dollar exchange rate.

Net income attributable to common shareholders improved to $11.6 million for the year ended March 31, 2013 as compared to a net loss of $6.1 million in the same period of 2012. As a result, fully diluted EPS improved to $0.95 in fiscal 2013, compared to a loss of per share of $0.82 in fiscal 2012.

The improvement to net income is generally attributed to enhanced market conditions, an increase in total wagers due to the reopening of a pachinko parlor that had been closed due to earthquake damage, a $5.2 million gain on forgiveness of debt, and a non-recurring $3.0 million gain resulting from a change in the Company's policy for employment termination benefits. Net income also increased as a result of improved payout ratios due to a shift in the mix of pachinko machines and the positive effects of Kinbasha's marketing programs to promote more cost effective prize payouts.

"We are extremely pleased to report our breakthrough financial results for fiscal 2013," said Masatoshi Takahama, Chief Executive Officer of Kinbasha. "Achieving $11.6 million in net income and an EPS of $0.95 is a milestone achievement for Kinbasha, and a testament to our stated goals of improving our operations and generating shareholder value. As we execute our strategic growth initiatives, we believe the decisions we have made will position Kinbasha to grow in our proven markets while also reducing expenses and reducing debt. We believe this will be a pivotal year for Kinbasha as we continue to improve our financial metrics and expand our presence in Japan's gaming sector."

During the year the Company was able to reduce its total debt from $159.8 million at March 31, 2012 to $132.3 million as of March 31, 2013. As of March 31, 2013, the total debt included $109.6 million of principal and $22.7 million of accrued interest. For the past several years, the Company has negotiated with its lenders and in many cases has obtained formal or informal forbearances and loan modifications that have allowed it to effectively extend the maturity of its debt through interest only and/or reduced principal payments. As of the date of this press release, Kinbasha was not subject to any litigation or foreclosure proceedings with respect to its debt.

http://finance.yahoo.com/news/kinbasha-gaming-international-inc-announces-110100418.html