MTR Gaming Group, Inc. (NasdaqGS: MNTG) today announced
financial results for the second quarter and six months ended June
30, 2012.
Second Quarter 2012 Highlights
- The June 1st opening of the video
lottery terminal (“VLT”) gaming facility at Scioto Downs with 1,787
VLTs, which added approximately 700 new jobs in the Columbus
area.
- Net revenue growth of 7.8%, including
revenue of $12.6 million at Scioto Downs.
- Adjusted EBITDA from continuing
operations for the second quarter of 2012 was $23.0 million, an
increase of 8.1% from the prior-year period, excluding $2.2 million
of project-opening costs in the second quarter of 2012 and $1.8
million received from a mineral rights lease bonus payment in the
second quarter of 2011.
“The second quarter was a historic one for MTR Gaming as we
opened our new VLT facility at Scioto Downs on June 1st, and we are
encouraged by the initial performance of this first-class
property,” said Jeffrey J. Dahl, President and Chief Executive
Officer of MTR Gaming Group, Inc. “Overall, we were pleased with
our second quarter revenues and adjusted EBITDA results.
Additionally, we recently completed the second phase of our
expansion at Scioto Downs, which provides for an additional 329
VLTs (which increased the total VLTs to 2,116), a buffet with
approximately 300 seats and a sports bar for patrons to enjoy.”
For the second quarter of 2012, the Company’s total net revenues
were $119.1 million, an increase of 7.8% compared to $110.5 million
in the same period of 2011. Excluding $2.2 million in
project-opening costs in the second quarter of 2012 and $1.8
million received from a mineral rights lease bonus payment in the
second quarter of 2011, adjusted EBITDA from continuing operations
in the second quarter of 2012 was $23.0 million, an increase of
8.1% from the prior-year period, and the adjusted EBITDA from
continuing operations margin was 19.3% for both the current and
prior-year periods.
The Company reported a loss from continuing operations of $2.1
million for the quarter, or $0.08 per diluted share, compared to
income from continuing operations of $2.3 million, or $0.08 per
diluted share, in the same period of 2011. Excluding $2.2 million
of project-opening costs related to the opening of the VLT facility
at Scioto Downs, second quarter 2012 income from continuing
operations would have been $0.1 million. Income from continuing
operations was also affected by a $3.0 million increase in interest
expense during the second quarter of 2012 (associated with the
Company’s debt refinancing in the third quarter of 2011).
Net revenues at Mountaineer Casino, Racetrack & Resort
increased 2.0% to $58.7 million in the second quarter of 2012
compared to $57.5 million (which includes $1.8 million received
from a mineral rights lease bonus payment) in the second quarter of
2011. Revenues from slots increased by $4.2 million compared to the
same quarter of 2011; however, revenues from table gaming at
Mountaineer decreased by $1.3 million compared to the prior-year
period. The decrease in table gaming revenues was primarily
attributable to increased competition from the new casino in
Cleveland, Ohio. The property saw adjusted EBITDA decrease to $12.3
million from $13.6 million in the comparable quarter of 2011, while
the adjusted EBITDA margin at Mountaineer decreased to 21.0%
compared to 23.6% in the prior-year quarter. Excluding the mineral
rights lease bonus payment in the second quarter of 2011, adjusted
EBITDA in the second quarter of 2012 increased 5.0% from the
prior-year period and the adjusted EBITDA margin was down 10 basis
points from the comparable period.
Net revenues at Presque Isle Downs & Casino decreased 8.2%
to $47.8 million during the second quarter of 2012 compared to
$52.1 million during the second quarter of 2011. Revenues from
slots decreased by $3.8 million compared to the same quarter of
2011, and revenues from table gaming at Presque Isle Downs
decreased by $0.3 million compared to the prior-year period. The
property generated adjusted EBITDA of $9.9 million compared to
$12.2 million in the same quarter of 2011, with the adjusted EBITDA
margin decreasing to 20.7% compared to 23.3% in the prior-year
period. The decrease in net revenues and Adjusted EBITDA for the
second quarter of 2012 was primarily attributable to increased
competition from a new casino in Ohio.
Net revenues at Scioto Downs were $12.6 million during the
second quarter of 2012 compared to $0.9 million during the second
quarter of 2011. The property generated adjusted EBITDA of $1.7
million compared to a loss of $0.4 million in the same quarter of
2011. The adjusted EBITDA margin for the second quarter of 2012 was
13.5%. The increase in net revenues and adjusted EBITDA for the
second quarter of 2012 was attributable to the opening of the VLT
facility on June 1, 2012.
Corporate overhead costs totaled $3.2 million during the second
quarter of 2012 compared to $2.2 million in the prior-year period,
with the increase due primarily to additional compensation-related
expenses.
For the first half of 2012, MTR’s total net revenues increased
8.7% to $227.1 million from $208.9 million in the first half of
2011. Adjusted EBITDA from continuing operations increased 4.8% to
$41.2 million (including $2.5 million of project-opening costs)
from $39.4 million (including $1.8 million received from a mineral
rights lease bonus payment) in the same period last year. The 2012
year-to-date loss from continuing operations was $5.3 million, or
$0.19 per diluted share, and included $2.5 million of
project-opening costs, $3.0 million of incremental interest expense
associated with the Company’s debt refinancing in the third quarter
of 2011, and approximately $1.3 million attributable to additional
valuation allowances on deferred tax assets. In the same period
last year, the Company reported a loss from continuing operations
of $2.9 million, or $0.10 per diluted share, which included income
tax expense of approximately $1.4 million attributable to
additional valuation allowances on deferred tax assets.
See attached tables, including a reconciliation of net income
(loss), a GAAP financial measure, to adjusted EBITDA, as well as
the calculation of adjusted EBITDA margin, non-GAAP financial
measures.
Balance Sheet and Liquidity
As of June 30, 2012, MTR had $93.6 million in cash and cash
equivalents, $32.5 million of funds that are held for further
construction of the VLT facility at Scioto Downs, and $552.8
million in total debt, net of discount. In addition, the Company
has $20 million available for borrowing under its revolving credit
facility.
Reconciliation of GAAP Measures to Non-GAAP Measures
Adjusted EBITDA represents earnings (losses) before interest,
income taxes, depreciation and amortization, gain (loss) on the
sale or disposal of property, other regulatory gaming assessment
costs, loss on asset impairment, loss on debt modification and
extinguishments and equity in loss of unconsolidated joint venture,
to the extent that such items existed in the periods presented.
Adjusted EBITDA margin represents the calculation of adjusted
EBITDA divided by net revenues. Adjusted EBITDA and adjusted EBITDA
margin are not measures of performance or liquidity calculated in
accordance with generally accepted accounting principles (“GAAP”),
are unaudited and should not be considered as an alternative to, or
more meaningful than, net income (loss) or operating margin as
indicators of our operating performance, or cash flows from
operating activities, as a measure of liquidity. Adjusted EBITDA
and adjusted EBITDA margin have been presented as supplemental
disclosures because they are widely used measures of performance
and basis’ for valuation of companies in our industry. Management
of the Company uses adjusted EBITDA and adjusted EBITDA margin as
primary measures of the Company’s operating performance and as
components in evaluating the performance of operating personnel.
Uses of cash flows that are not reflected in adjusted EBITDA
include capital expenditures, interest payments, income taxes, debt
principal repayments, and certain regulatory gaming assessments
which can be significant. Moreover, other companies that provide
EBITDA and/or adjusted EBITDA information may calculate EBITDA
and/or adjusted EBITDA differently than we do. A reconciliation of
GAAP net income (loss) to adjusted EBITDA, as well as the
calculation of adjusted EBITDA margin, 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 today at 4:30 p.m.
EDT. Interested parties may participate in the call by dialing
(888) 599-8691. Please call in 10 minutes before the call is
scheduled to begin and ask for the MTR Gaming call (conference ID
#6598418).
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 to the live call, the conference call will be
archived on the Investor Relations section of the Company’s
website.
A replay of the call will be available two hours following the
end of the call through midnight EDT on Thursday, August 16, 2012
at www.mtrgaming.com and by telephone at (877) 870-5176; passcode
6598418.
About MTR Gaming Group
MTR Gaming Group, Inc. is a hospitality and gaming company that
through subsidiaries owns and operates Mountaineer Casino,
Racetrack & Resort in Chester, West Virginia; Presque Isle
Downs & Casino in Erie, Pennsylvania; and Scioto Downs in
Columbus, Ohio. For more information, please visit
www.mtrgaming.com.
Forward-Looking Statements
Except for historical information, this press release contains
forward-looking statements concerning, among other things the
prospects for improving the results of our operations at
Mountaineer, Presque Isle Downs and Scioto Downs, including the
successful operation of video lottery terminals at Scioto 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 impact of new competition for
Mountaineer, Presque Isle Downs and Scioto Downs (including casino
gaming and video lottery terminals in Ohio), the successful
integration and operation of video lottery terminals at Scioto
Downs, the effectiveness of our marketing programs, the enactment
of future gaming legislation in the jurisdictions in which we
operate (including the implementation of casino gaming in Cleveland
and Columbus, Ohio and the implementation of video lottery
terminals at racetracks in Ohio), changes in, or failure to comply
with, laws, regulations or the conditions of our gaming licenses,
accounting standards or environmental laws, including adverse
changes 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, our ability to maintain or improve our operating
margins, our continued suitability to hold and obtain renewals of
our gaming and racing licenses, our ability to fulfill our
obligations and comply with the covenants associated with our
various debt instruments and/or our ability to obtain additional
debt and/or equity financing, if and when needed, 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.
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 2012 2011 2012 2011
Revenues: Gaming $ 107,503 $ 97,634 $ 207,644 $ 188,580
Pari-mutuel commissions 3,364 3,293 4,523 4,379 Food, beverage and
lodging 8,786 8,164 16,660 15,317 Other
2,612
4,223 4,558
5,762 Total revenues 122,265
113,314 233,385 214,038 Less promotional allowances
(3,148 ) (2,796
) (6,318 )
(5,182 ) Net revenues
119,117 110,518
227,067 208,856
Operating expenses: Expenses of operating
departments: Gaming 65,250 60,153 127,376 117,154 Pari-mutuel
commissions 3,351 3,404 4,915 5,194 Food, beverage and lodging
6,734 5,899 12,508 11,342 Other 1,893 1,734 3,238 2,989 Marketing
and promotions 3,708 2,916 6,781 6,238 General and administrative
15,123 13,287 28,320 26,582 Project opening costs 2,237 7 2,496 7
Depreciation 5,861 6,981 12,099 14,054 Loss (gain) on the sale or
disposal of property
1
(197 ) (4
) (196 ) Total
operating expenses
104,158
94,184 197,729
183,364 Operating income 14,959
16,334 29,338 25,492 Other income (expense): Interest income
54 8 134 16 Interest expense
(16,395
) (13,364 )
(33,415 ) (26,732
) (Loss) income from continuing operations
before income taxes (1,382 ) 2,978 (3,943 ) (1,224 ) Provision for
income taxes
(718 )
(716 ) (1,348
) (1,647 )
(Loss) income from continuing operations
(2,100 )
2,262 (5,291
) (2,871
) Discontinued operations: Loss from
discontinued operations before income taxes (255 ) - (255 ) -
Provision for income taxes
-
- -
- Loss from discontinued operations
(255 ) -
(255 ) -
Net (loss) income $
(2,355 )
$ 2,262
$ (5,546
) $
(2,871 ) Net
(loss) income per share - basic: (Loss) income from continuing
operations $ (0.08 ) $ 0.08 $ (0.19 ) $ (0.10 ) Loss from
discontinued operations
(0.01 )
- (0.01
) - Net (loss) income
$ (0.09 ) $
0.08 $ (0.20
) $ (0.10 )
Net (loss) income per share - diluted: (Loss) income
from continuing operations $ (0.08 ) $ 0.08 $ (0.19 ) $ (0.10 )
Loss from discontinued operations
(0.01
) -
(0.01 ) - Net
(loss) income
$ (0.09 )
$ 0.08 $
(0.20 ) $ (0.10
) Weighted average number of shares
outstanding: Basic
27,984,595
27,800,392 27,972,318
27,759,050 Diluted
27,984,595 27,869,684
27,972,318
27,759,050 MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (dollars in thousands)
(unaudited) Three Months
Ended Six Months Ended June 30 June 30
2012 2011 2012 2011 Net
revenues: Mountaineer Casino, Racetrack & Resort $ 58,671 $
57,493 $ 117,646 $ 108,904 Presque Isle Downs & Casino 47,797
52,089 96,673 98,904 Scioto Downs 12,637 914 12,715 1,005 Corporate
12 22
33 43
Consolidated net revenues $
119,117 $
110,518 $
227,067 $
208,856 Adjusted EBITDA
from continuing operations: Mountaineer Casino, Racetrack &
Resort $ 12,322 $ 13,573 $ 25,082 $ 22,848 Presque Isle Downs &
Casino 9,880 12,150 20,715 22,085 Scioto Downs 1,709 (435 ) 977
(917 ) Corporate
(3,149 )
(2,170 ) (5,533
) (4,666 )
Consolidated Adjusted EBITDA from continuing operations
$ 20,762 $ 23,118 $
41,241 $ 39,350 Adjusted EBITDA from
discontinued operations
(255 )
- (255
) - Consolidated
Adjusted EBITDA $
20,507 $
23,118 $
40,986 $
39,350
The following tables set forth a reconciliation of income (loss)
from continuing operations and income (loss) from discontinued
operations, GAAP financial measures, to Adjusted EBITDA, as well as
the calculation of Adjusted EBITDA margin, non-GAAP financial
measures.
Three Months Ended Six
Months Ended June 30 June 30 2012
2011 2012 2011 Adjusted EBITDA from
continuing operations: Mountaineer Casino, Racetrack
& Resort: Income from continuing operations $ 9,512 $
10,790 $ 19,472 $ 16,938 Interest expense - 8 - 18 Depreciation
2,810 2,974 5,615 6,090 Gain on the sale or disposal of property
- (199
) (5 )
(198 ) Adjusted EBITDA from continuing
operations $ 12,322
$ 13,573 $
25,082 $ 22,848
Net revenues $ 58,671
$ 57,493 $
117,646 $ 108,904
Adjusted EBITDA margin
21.0 %
23.6 %
21.3 %
21.0 % Presque
Isle Downs & Casino: Income from continuing operations $
7,367 $ 7,631 $ 14,513 $ 12,885 Interest (income) expense, net (5 )
2 (29 ) 6 Provision for income taxes 626 713 1,253 1,637
Depreciation 1,950 3,802 5,169 7,555 Other regulatory gaming
assessments (59 ) - (192 ) - Loss on the sale or disposal of
property
1 2
1 2
Adjusted EBITDA from continuing operations $
9,880 $ 12,150
$ 20,715 $
22,085 Net revenues $
47,797 $ 52,089
$ 96,673 $
98,904 Adjusted EBITDA margin
20.7 %
23.3 %
21.4 %
22.3 % MTR
GAMING GROUP, INC. SELECTED FINANCIAL INFORMATION
(continued) (dollars in thousands) (unaudited)
Three Months Ended Six Months Ended June
30 June 30 2012 2011 2012
2011 Adjusted EBITDA from continuing operations
(continued): Scioto Downs: Income (loss) from
continuing operations $ 1,397 $ (634 ) $ 692 $ (1,316 )
(Capitalized interest) interest expense (892 ) 7 (1,120 ) 15
Provision for income taxes 114 - 114 - Depreciation
1,090 192
1,291 384
Adjusted EBITDA from continuing operations [1]
$ 1,709 $
(435 ) $ 977
$ (917 ) Net
revenues $ 12,637
$ 914 $
12,715 $ 1,005
Adjusted EBITDA margin 13.5
% N/A
7.7 %
N/A Corporate: Loss from
continuing operations $ (20,376 ) $ (15,525 ) $ (39,968 ) $ (31,378
) Interest expense, net of interest income 17,238 13,339 34,430
26,677
(Benefit) provision for income taxes
(22 ) 3 (19 ) 10 Depreciation
11
13 24
25 Adjusted EBITDA from continuing
operations $ (3,149 )
$ (2,170 ) $
(5,533 ) $
(4,666 ) Consolidated:
(Loss) income from continuing operations $ (2,100 ) $ 2,262 $
(5,291 ) $ (2,871 ) Interest expense, net of interest income and
capitalized interest 16,341 13,356 33,281 26,716 Provision for
income taxes 718 716 1,348 1,647 Depreciation 5,861 6,981 12,099
14,054 Other regulatory gaming assessments (59 ) - (192 ) - Loss
(gain) on the sale or disposal of property
1
(197 )
(4 ) (196
) Adjusted EBITDA from continuing operations
[1] $ 20,762 $
23,118 $ 41,241
$ 39,350 Net
revenues $ 119,117
$ 110,518 $
227,067 $ 208,856
Adjusted EBITDA margin
17.4 %
20.9 %
18.2 %
18.8 %
Adjusted EBITDA from discontinued operations: Loss
from discontinued operations $ (255 ) $ - $ (255 ) $ - Provision
for income taxes
- -
- -
Adjusted EBITDA from discontinued operations $
(255 ) $ -
$ (255 )
$ -
[1]
Adjusted EBITDA from continuing operations
for the three and six months ended June 30, 2012, included
project-opening costs of $2,237,000 and $2,496,000, respectively,
related to video lottery gaming operations at Scioto Downs which
commenced June 1, 2012. Additionally, Adjusted EBITDA from
continuing operations for the three and six months ended June 30,
2011, included a mineral rights lease bonus payment that was
received by Mountaineer in the amount of $1,840,000.
MTR GAMING GROUP, INC. CONSOLIDATED BALANCE SHEETS
(dollars in thousands) June 30
December 31 2012 2011 (unaudited)
ASSETS Current assets: Cash and cash equivalents $
93,579 $ 85,585 Restricted cash 2,427 1,146
Accounts receivable, net of allowance for
doubtful accounts of $361 in 2012 and $383 in 2011
4,309 4,554 Amounts due from West Virginia Lottery Commission 432
122 Inventories 3,958 3,503 Deferred financing costs 1,641 1,622
Deferred income taxes 496 494 Prepaid expenses and other current
assets
7,080 5,366
Total current assets 113,922 102,392 Property and
equipment, net 385,487 299,579 Funds held for construction project
32,481 130,114 Other intangible assets 135,577 85,577 Deferred
financing costs, net of current portion 9,228 9,919 Deposits and
other 1,902 1,902 Non-operating real property 11,207 11,207 Assets
of discontinued operations
181
181 Total assets
$
689,985 $ 640,871
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 4,343 $ 1,461 Accounts
payable - gaming taxes and assessments 7,167 8,854 Accrued payroll
and payroll taxes 4,200 3,872 Accrued interest 27,233 27,072
Accrued income taxes 574 958 Other accrued liabilities 12,194
10,741 Construction project and equipment liabilities 24,677 3,732
License fee payable 25,000 - Liabilities of discontinued operations
451 223 Total
current liabilities 105,839 56,913 Long-term debt 552,817
548,933 Other regulatory gaming assessments 4,976 5,408 Long-term
compensation 501 242 Deferred income taxes
12,415 11,048 Total
liabilities
676,548
622,544 Stockholders' equity: Common
stock - - Additional paid-in capital 63,444 62,804 Accumulated
deficit (49,834 ) (44,288 ) Accumulated other comprehensive loss
(388 ) (404
) Total stockholders' equity of MTR Gaming Group, Inc.
13,222 18,112 Non-controlling interest of discontinued operations
215 215 Total
stockholders' equity
13,437
18,327 Total liabilities and stockholders'
equity
$ 689,985 $
640,871
Mtr Gaming (NASDAQ:MNTG)
Historical Stock Chart
From Apr 2024 to May 2024
Mtr Gaming (NASDAQ:MNTG)
Historical Stock Chart
From May 2023 to May 2024