MTR Gaming Group Announces Second Quarter Results: Net Revenues up 11% in Second Quarter and 18% Year-to-Date
EBITDA from Continuing Operations up 7% in Second Quarter and 17%
Year-to-Date
CHESTER, W. Va.--(Business Wire)--
MTR Gaming Group, Inc. (NasdaqGS: MNTG) today announced financial
results for the second quarter and six months ended June 30, 2008.
Current and prior year results reflect the reclassification of
Speedway Casino and Binion's Gambling Hall & Hotel as discontinued
operations. See attached tables (including Reconciliation of Non-GAAP
Measures to GAAP).
For the second quarter, net revenues increased to $126.9 million,
up 11% from $114.6 million in the same period of 2007. EBITDA from
continuing operations was $17.9 million, up 7% compared to $16.6
million in the second quarter of 2007. The increase in revenues was
primarily due to the addition of table games and poker at Mountaineer
and increased slot revenues from Presque Isle Downs. The increase in
EBITDA from continuing operations is directly attributable to improved
operating performance from Presque Isle Downs and the favorable impact
from the implementation of table games. The Company reported a net
loss of $2.3 million or $0.08 per diluted share, which included
$42,000 of income or $0.00 per diluted share from discontinued
operations. In the second quarter of 2007, the net loss was $502,000
or $0.03 per diluted share.
Net revenues at the Mountaineer Casino, Racetrack & Resort
increased 11% to $75.4 million, compared to $68.0 million in the
second quarter of 2007. Poker and table games generated $1.7 million
and $9.7 million of revenues, respectively, during the second quarter
of 2008. Mountaineer's revenue from slots decreased by $5.7 million.
This decrease is primarily attributable to the impact of competing
gaming operations in Pennsylvania. The property generated EBITDA of
$11.7 million, versus $12.1 million in the comparable quarter of 2007.
For the second quarter of 2008, Presque Isle Downs' net revenues
increased to $48.9 million, up 11% compared to $43.9 million in the
same period 2007 due to increased slot play. For the second quarter,
Presque Isle Downs' slot win per day per machine was $250 compared to
$231 for the same period in 2007. EBITDA was $9.6 million for the
second quarter of 2008, up 13% from $8.5 million in the same period
last year.
During the second quarter, Running Aces Harness Park, MTR's 50%
joint venture, commenced racing on April 11, 2008 and on June 30, 2008
opened a 50-table card room. The Company incurred an equity loss of
$2.1 million for the quarter, which is primarily attributable to
preopening costs.
Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group,
pointed out, "During the second quarter, we completed the sale of our
Nevada assets, continued to benefit from poker and table games at
Mountaineer, improved our operating performance at Presque Isle Downs,
and continued to reduce our debt. As previously announced in June, we
sold the gaming assets of the Speedway Casino for $2 million at
closing with the ability to receive up to an additional $4.775 million
based on the property's gross revenue over the four years commencing
January 1, 2008. Earlier in the year, we sold the Speedway's real
estate for $11.4 million. The net cash generated from these
transactions as well as from the sale of Binion's in March was used to
reduce our outstanding indebtedness."
For the first half of 2008, MTR's total net revenues increased 18%
to $240.4 million from $203.5 million in the first six months of 2007.
EBITDA from continuing operations increased 17% to $34.1 million from
$29.2 million in the same period last year. Net loss was $4.9 million
or $0.18 per diluted share compared to net income of $57,000 or $0.00
per diluted share in the first half of 2007.
Mr. Arneault concluded, "We expect continued gains in our
top-line, as well as improved operating results at Mountaineer and
continued growth at Presque Isle Downs. We remain focused on managing
costs, increasing operating profits at our core properties and paying
down debt."
Affirms 2008 Guidance
The Company also reaffirmed its previous 2008 guidance:
-- Total revenues of at least $504 million;
-- EBITDA from continuing operations of at least $72 million; and
-- Net loss of no more than $2.0 million.
Reconciliation of Non-GAAP Measures to GAAP
EBITDA represents earnings (losses) before interest, income tax
expense (benefit), depreciation and amortization, equity in loss of
unconsolidated joint venture and gain (loss) on disposal of property.
EBITDA is not a measure of performance or liquidity calculated in
accordance with generally accepted accounting principles ("GAAP"), is
unaudited and should not be considered as an alternative to, or more
meaningful than, net income or income from operations as an indicator
of our operating performance, or cash flows from operating activities,
as a measure of liquidity. EBITDA has been presented as a supplemental
disclosure because it is a widely used measure of performance and
basis for valuation of companies in our industry. Uses of cash flows
that are not reflected in EBITDA include capital expenditures (which
are significant given our expansion), interest payments, income taxes,
and debt principal repayments. Moreover, other companies that provide
EBITDA information may calculate EBITDA differently than we do. A
reconciliation of GAAP net income (loss) to EBITDA is included in the
financial tables accompanying this release.
Conference Call
Management will conduct a conference call focusing on the
financial results and corporate developments at 9:00 a.m. EDT on
Wednesday, July 30, 2008. Interested parties may participate in the
call by dialing (706) 679-0882. Please call in 10 minutes before the
call is scheduled to begin and ask for the MTR Gaming call (conference
ID #57351968).
The conference call will be webcast live via the Investor
Relations section of the Company's website at www.mtrgaming.com. To
listen to the live webcast please go to the website at least 15
minutes early to register, download and install any necessary audio
software. If you are unable to listen live, conference call will be
archived on the Investor Relations section of the Company's web site.
About MTR Gaming Group
MTR Gaming Group, Inc., through subsidiaries, owns and operates
Mountaineer Casino, Racetrack & Resort in Chester, WV; Presque Isle
Downs & Casino in Erie, PA; and Scioto Downs in Columbus, OH. The
Company also owns a 90% interest in Jackson Trotting Association, LLC,
which operates Jackson Harness Raceway in Jackson, MI, and a 50%
interest in the North Metro Harness Initiative, LLC, which operates
Running Aces Harness Park in Minneapolis, MN. For more information,
please visit www.mtrgaming.com.
Except for historical information, this press release contains
forward-looking statements concerning, among other things, financial
performance for 2008, and the prospects for improving the results of
our operations at Mountaineer and Presque Isle Downs. Such statements
are subject to a number of risks and uncertainties that could cause
the statements made to be incorrect and/or for actual results to
differ materially. Those risks and uncertainties include, but are not
limited to, the absence of any new competition for Mountaineer and
Presque Isle Downs in 2008, no increase in the gaming tax rates that
the Company currently pays in its various jurisdictions, general
economic conditions, disruption (occasioned by weather conditions or
work stoppages) of our operations and the success of the table gaming
at Mountaineer (including the anticipated continued positive impact of
table gaming on slot operations and resort operations), our ability to
improve our operating margins, our continued suitability to hold and
obtain renewals of our gaming and racing licenses, our compliance with
environmental laws and potential exposure to environmental
liabilities, and other factors described in the Company's periodic
reports filed with the Securities and Exchange Commission. The Company
does not intend to update publicly any forward-looking statements,
except as may be required by law. The cautionary advice in this
paragraph is permitted by the Private Securities Litigation Reform Act
of 1995.
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MTR GAMING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
Revenues:
Gaming $ 110,674 $ 101,291 $ 213,602 $ 181,162
Parimutuel
commissions 5,600 4,695 8,188 7,454
Food, beverage
and lodging 10,077 7,874 18,173 13,813
Other 2,748 2,129 4,413 3,632
------------ ------------ ------------ ------------
Total revenues 129,099 115,989 244,376 206,061
Less promotional
allowances (2,244) (1,439) (3,931) (2,573)
------------ ------------ ------------ ------------
Net revenues 126,855 114,550 240,445 203,488
------------ ------------ ------------ ------------
Operating
expenses:
Expenses of
operating
departments:
Gaming 71,594 65,102 136,290 113,614
Parimutuel
commissions 5,048 3,506 8,080 6,038
Food, beverage
and lodging 7,998 6,921 14,915 11,696
Other revenue 2,501 1,746 4,319 3,332
Marketing and
promotions 4,567 4,334 8,145 7,230
General and
administrative 17,299 15,835 34,637 29,088
Depreciation 7,483 7,165 15,015 12,685
(Gain) loss on
disposal of
property (1) (2) 159 65
Project opening
costs - 538 - 3,479
------------ ------------ ------------ ------------
Total operating
expenses 116,489 105,145 221,560 187,227
------------ ------------ ------------ ------------
Operating income 10,366 9,405 18,885 16,261
Other (expense)
income:
Equity in loss
of
unconsolidated
joint venture (2,083) (14) (2,425) (14)
Interest income 52 116 145 270
Interest expense (10,427) (8,770) (20,681) (15,001)
Loss on debt
modification - - (3,356) -
------------ ------------ ------------ ------------
(Loss) income from
continuing
operations before
income taxes and
minority interest (2,092) 737 (7,432) 1,516
(Provision)
benefit for
income taxes (268) (458) 2,282 (904)
------------ ------------ ------------ ------------
(Loss) income from
continuing
operations before
minority interest (2,360) 279 (5,150) 612
Minority interest 10 41 15 113
------------ ------------ ------------ ------------
(Loss) income from
continuing
operations (2,350) 320 (5,135) 725
------------ ------------ ------------ ------------
Discontinued
operations:
(Loss) income
from
discontinued
operations
before income
taxes (38) (1,576) 338 (1,310)
Benefit
(provision) for
income taxes 80 754 (137) 642
------------ ------------ ------------ ------------
Income (loss) from
discontinued
operations 42 (822) 201 (668)
------------ ------------ ------------ ------------
Net (loss) income $ (2,308) $ (502) $ (4,934) $ 57
============ ============ ============ ============
Net (loss) income
per share -
basic:
(Loss) income
from continuing
operations $ (0.08) $ 0.01 $ (0.19) $ 0.03
Income (loss)
from
discontinued
operations 0.00 (0.03) 0.01 $ (0.03)
------------ ------------ ------------ ------------
Net (loss)
income $ (0.08) $ (0.02) $ (0.18) $ 0.00
============ ============ ============ ============
Net (loss) income
per share -
diluted:
(Loss) income
from continuing
operations $ (0.08) $ 0.01 $ (0.19) $ 0.03
Income (loss)
from
discontinued
operations 0.00 (0.03) 0.01 (0.03)
------------ ------------ ------------ ------------
Net (loss)
income $ (0.08) $ (0.02) $ (0.18) $ 0.00
============ ============ ============ ============
Weighted average
number of shares
outstanding:
Basic 27,475,260 27,544,955 27,475,260 27,534,297
============ ============ ============ ============
Diluted 27,475,260 27,544,955 27,475,260 27,894,052
============ ============ ============ ============
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MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
---------------------------------------
2008 2007 2008 2007
--------- ------------------- ---------
Net revenues from continuing
operations:
Mountaineer $ 75,362 $ 67,970 $149,408 $134,519
Presque Isle Downs 48,928 43,904 87,740 64,963
Scioto Downs 1,450 1,444 1,576 2,080
Jackson Racing 1,112 1,223 1,715 1,892
MTR-Harness / Running Aces - 6 - 28
Corporate 3 3 6 6
--------- --------- --------- ---------
Consolidated net revenues from
continuing operations $126,855 $114,550 $240,445 $203,488
========= ========= ========= =========
EBITDA from continuing
operations:
Mountaineer $ 11,728 $ 12,134 $ 25,827 $ 25,831
Presque Isle Downs 9,619 8,476 16,054 10,832
Scioto Downs (336) (561) (987) (1,018)
Jackson Racing (147) (136) (244) (170)
MTR-Harness / Running Aces (23) (51) (44) (178)
Corporate (2,980) (3,237) (6,526) (6,109)
--------- --------- --------- ---------
Consolidated EBITDA from
continuing operations $ 17,861 $ 16,625 $ 34,080 $ 29,188
EBITDA from discontinued
operations:
Binion's Gambling Hall &
Hotel - (949) (1,511) (1,631)
Ramada Inn and Speedway
Casino (712) 363 (750) 932
--------- --------- --------- ---------
Consolidated EBITDA $ 17,149 $ 16,039 $ 31,819 $ 28,489
========= ========= ========= =========
----------------------------------------------------------------------
The following tables set forth a reconciliation of net income (loss),
a GAAP financial measure,
to EBITDA, a non-GAAP financial measure.
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
---------------------------------------
2008 2007 2008 2007
--------- ------------------- ---------
EBITDA FROM CONTINUING
OPERATIONS:
Mountaineer:
Income from continuing
operations $ 4,602 $ 2,609 $ 9,442 $ 6,837
Interest expense, net of
interest income 2,253 2,058 4,518 4,136
Provision for income taxes 1,135 3,508 4,362 6,569
Depreciation 3,738 3,959 7,505 8,212
Loss on disposal of
property - - - 77
--------- --------- --------- ---------
EBITDA from continuing
operations $ 11,728 $ 12,134 $ 25,827 $ 25,831
========= ========= ========= =========
Presque Isle Downs:
Income from continuing
operations $ 4,172 $ 2,715 $ 5,691 $ 3,191
Interest expense 406 197 860 656
Provision for income taxes 1,617 2,664 2,629 3,113
Depreciation 3,424 2,900 6,874 3,872
--------- --------- --------- ---------
EBITDA from continuing
operations $ 9,619 $ 8,476 $ 16,054 $ 10,832
========= ========= ========= =========
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MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (continued)
(dollars in thousands)
(unaudited)
Three Months Six Months Ended
Ended
June 30 June 30
----------------- ------------------
2008 2007 2008 2007
-------- -------- --------- --------
EBITDA FROM CONTINUING OPERATIONS
(continued):
Scioto Downs:
Loss from continuing
operations $ (355) $ (364) $ (897) $ (771)
Interest expense, net of
interest income 27 32 56 64
Benefit for income taxes (236) (446) (598) (741)
Depreciation 228 217 452 430
-------- -------- --------- --------
EBITDA from continuing
operations $ (336) $ (561) $ (987) $(1,018)
======== ======== ========= ========
Jackson Racing:
Loss from continuing
operations $ (130) $ (69) $ (288) $ (92)
Interest expense, net of
income expense and minority
interest 1 2 2 3
Benefit for income taxes, net
of minority interest (27) (72) (133) (89)
Depreciation, net of minority
interest 10 5 16 10
(Gain) loss on disposal of
property, net of minority
interest (1) (2) 159 (2)
-------- -------- --------- --------
EBITDA from continuing
operations $ (147) $ (136) $ (244) $ (170)
======== ======== ========= ========
MTR-Harness / Running Aces:
Loss from continuing
operations $(1,472) $ (45) $ (1,690) $ (121)
Interest expense, net of
interest income and minority
interest 2 38 2 42
Benefit for income taxes, net
of minority interest (636) (61) (781) (116)
Depreciation, net of minority
interest - 3 - 3
Equity in loss of North Metro
Harness Initiative, LLC 2,083 14 2,425 14
-------- -------- --------- --------
EBITDA from continuing
operations $ (23) $ (51) $ (44) $ (178)
======== ======== ========= ========
Corporate:
Loss from continuing
operations $(9,167) $(4,526) $(17,393) $(8,319)
Interest expense, net of
interest income 7,685 6,289 15,098 9,788
Benefit for income taxes (1,581) (5,079) (7,754) (7,724)
Depreciation 83 79 167 156
Gain on disposal of property - - - (10)
Loss on debt modification - - 3,356 -
-------- -------- --------- --------
EBITDA from continuing
operations $(2,980) $(3,237) $ (6,526) $(6,109)
======== ======== ========= ========
Consolidated:
(Loss) income from continuing
operations $(2,350) $ 320 $ (5,135) $ 725
Interest expense, net of
interest income and minority
interest 10,374 8,616 20,536 14,689
Provision (benefit) for
income taxes, net of
minority interest 272 514 (2,275) 1,012
Depreciation, net of minority
interest 7,483 7,163 15,014 12,683
(Gain) loss on disposal of
property (1) (2) 159 65
Loss on debt modification - - 3,356 -
Equity in loss of North Metro
Harness Initiative, LLC 2,083 14 2,425 14
-------- -------- --------- --------
EBITDA from continuing
operations $17,861 $16,625 $ 34,080 $29,188
======== ======== ========= ========
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MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (continued)
(dollars in thousands)
(unaudited)
Three Months Six Months Ended
Ended
June 30 June 30
--------------- -----------------
2008 2007 2008 2007
-------- ------ -------- --------
EBITDA from discontinued operations:
Binion's Gambling Hall & Hotel:
Income (loss) from discontinued
operations $ 9 $(834) $(1,357) $ (831)
Interest income, net of interest
expense - (2) (29) (28)
(Benefit) for income taxes (9) (801) (809) (799)
Depreciation - 693 - 1,300
Other income - - - (1,268)
(Gain) loss on disposal of
property - (5) 684 (5)
-------- ------ -------- --------
EBITDA from discontinued
operations $ - $(949) $(1,511) $(1,631)
======== ====== ======== ========
Ramada Inn and Speedway Casino:
Income from discontinued
operations $ 201 $ 12 $ 1,726 $ 163
Interest expense 66 97 163 194
Provision for income taxes 162 47 1,179 157
Depreciation 73 207 199 418
Gain on disposal of property (1,214) - (4,017) -
-------- ------ -------- --------
EBITDA from discontinued
operations $ (712) $ 363 $ (750) $ 932
======== ====== ======== ========
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MTR GAMING GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30 December 31
2008 2007
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 26,839 $ 31,045
Restricted cash 1,186 560
Accounts receivable, net of allowance for
doubtful accounts
of $195 in 2008 and $92 in 2007 9,684 10,062
Accounts Receivable - West Virginia Lottery
Commission 1,955 -
Inventories 4,584 4,407
Deferred financing costs 4,373 3,203
Prepaid income taxes 956 851
Deferred income taxes 1,507 1,428
Other current assets 6,623 5,094
Assets held for sale - 3,290
----------- -----------
Total current assets 57,707 59,940
Property and equipment, net 381,513 390,426
Goodwill 1,984 2,145
Other intangibles 71,498 71,827
Deferred financing costs, net of current
portion 4,728 8,123
Equity method investment 9,682 11,609
Deposits and other 26,900 26,078
Assets held for sale - 40,814
----------- -----------
Total assets $ 554,012 $ 610,962
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,283 $ 9,064
Accounts payable - gaming taxes and
assessments 6,432 9,446
Accrued payroll and payroll taxes 4,568 4,728
Accrued interest 5,120 6,456
Other accrued liabilities 14,542 11,683
Construction project liabilities 855 4,225
Current portion of long-term debt and
capital lease obligations 12,833 11,108
Liabilities held for sale - 4,881
----------- -----------
Total current liabilities 51,633 61,591
Long-term debt and capital lease obligations,
net of current portion 382,433 420,520
Long-term deferred compensation 11,466 10,545
Deferred income taxes 210 940
Liabilities held for sale - 4,914
----------- -----------
Total liabilities 445,742 498,510
Minority interest 306 305
Shareholders' equity:
Common stock - -
Paid-in capital 61,229 60,478
Retained earnings 46,790 51,724
Accumulated other comprehensive loss (55) (55)
----------- -----------
Total shareholders' equity 107,964 112,147
----------- -----------
Total liabilities and shareholders' equity $ 554,012 $ 610,962
=========== ===========
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MTR Gaming Group, Inc.
Steven D. Overly, 304-387-8558
VP, Business and Legal Affairs
soverly@mtrgaming.com
www.mtrgaming.com
or
David Hughes, 304-479-1494
Corporate Executive VP and CFO
dhughes@mtrgaming.com
or
Investor Relations Counsel:
The Equity Group Inc.
Melissa Dixon, 212-836-9613
MDixon@equityny.com
or
Linda Latman, 212-836-9609
LLatman@equityny.com
www.theequitygroup.com
Copyright Business Wire 2008
