MTR Gaming Group, Inc. (NasdaqGS:MNTG) today announced financial
results for the third quarter and nine months ended September 30,
2013.
Strategic Development
On September 9, 2013, the Company and Eldorado HoldCo, LLC
entered into a definitive agreement under which MTR will combine
with Eldorado in a strategic business combination.
Third Quarter 2013 Results
For the third quarter of 2013, the Company’s total net revenues
were $128.9 million, a decrease of 11.5% compared to $145.6 million
in the same period of 2012. Adjusted EBITDA from continuing
operations in the third quarter of 2013 was $22.5 million
(including strategic transaction costs of $2.7 million), a decrease
of 28.2% from the prior-year period, and adjusted EBITDA margin
from continuing operations was 17.5%, a decrease of 400 basis
points from the prior-year period.
“Scioto Downs continued to maintain a strong market position but
the overall market growth in Columbus fell short of our
expectations in the quarter,” said Joseph L. Billhimer, President
and Chief Operating Officer of MTR Gaming Group, Inc.
“Additionally, our results at Mountaineer Park and Presque Isle
Downs were impacted by the aggressive marketing and promotional
environment from our competitors, along with the general
uncertainty in the economy. We remain extremely confident in the
Columbus market and will continue to improve our existing
operations through targeted marketing programs, thoughtful capital
improvements and cost containment initiatives that do not affect
the guest service for which our properties are known.”
The Company reported a net loss of $3.6 million for the quarter,
or $0.13 per diluted share, compared to net income of $5.3 million,
or $0.19 per diluted share, in the same period of 2012. Excluding
$2.7 million in costs associated with MTR’s strategic initiatives,
the loss from continuing operations in the third quarter of 2013
would have been $0.9 million, or $0.03 per diluted share.
Net revenues at Scioto Downs decreased 13.1% to $36.2 million
during the third quarter of 2013 compared to $41.7 million in the
third quarter of 2012, and decreased $1.4 million or 3.6%
sequentially from the second quarter of 2013. The property saw
adjusted EBITDA decrease to $11.6 million from $15.1 million in the
comparable quarter of 2012, while the adjusted EBITDA margin at
Scioto Downs decreased to 32.1% compared to 36.2% in the prior-year
quarter. The decrease in revenues and adjusted EBITDA for the third
quarter of 2013 was primarily attributable to the addition of a
competitor in the Columbus gaming market in October 2012. However,
Scioto Downs has been able to maintain an approximate 50% share of
the Columbus slot market.
Net revenues at Mountaineer Casino, Racetrack & Resort
decreased 10.4% to $50.6 million in the third quarter of 2013
compared to $56.5 million in the third quarter of 2012, and
decreased $1.1 million or 2.2% sequentially from the second quarter
of 2013. Revenues from slots decreased by $5.2 million, while
revenue from table gaming decreased by $0.6 million, compared to
the same quarter of 2012. The property saw adjusted EBITDA decrease
to $9.7 million from $11.2 million in the comparable quarter of
2012, while the adjusted EBITDA margin at Mountaineer decreased to
19.1% compared to 19.9% in the prior-year quarter. The decrease in
table gaming revenues and adjusted EBITDA for the third quarter of
2013 was primarily attributable to ongoing competition from Ohio
gaming facilities.
Net revenues at Presque Isle Downs & Casino decreased 11.4%
to $42.0 million during the third quarter of 2013 compared to $47.5
million during the third quarter of 2012, and were flat
sequentially with the second quarter of 2013. Revenues from slots
and table gaming decreased by $4.6 million and $0.9 million,
respectively, compared to the same quarter of 2012. The property
generated adjusted EBITDA of $6.2 million compared to $8.6 million
in the same quarter of 2012, with the adjusted EBITDA margin
decreasing to 14.7% compared to 18.1% in the prior-year period. The
decrease in net revenues and adjusted EBITDA for the third quarter
of 2013 was also primarily attributable to increased gaming
competition from Ohio gaming facilities.
Corporate overhead costs totaled $5.0 million during the third
quarter of 2013 compared to $3.5 million in the prior-year period,
with the increase due primarily to costs of $2.7 million associated
with strategic initiatives.
Nine Month Results
For the nine months ended September 30, 2013, MTR’s total net
revenues increased 3.2% to $383.0 million from $371.2 million in
the nine months ended September 30, 2012. Adjusted EBITDA from
continuing operations increased 3.2% to $75.0 million (including
$2.7 million in strategic initiative costs) from $72.6 million
(including $2.7 million of project-opening costs) in the same
period last year, while the adjusted EBITDA margin was 19.6% as
compared to 19.5% in the prior-year period. The 2013 year-to-date
net loss was $2.0 million, or $0.07 per diluted share, and includes
$2.7 million in strategic initiative costs. In the same period last
year, the Company reported a net loss of $0.2 million, or $0.01 per
diluted share, which included $2.7 million of project-opening costs
and a loss of $0.3 million from discontinued operations.
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, each of which are
non-GAAP financial measures.
Balance Sheet and Liquidity
As of September 30, 2013, MTR had $86.1 million in cash and cash
equivalents, $4.1 million in restricted cash and $558.3 million in
total debt, net of discount. In addition, the Company has $20.0
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.
These non-GAAP financial measures have limitations as an analytical
tool, should not be viewed as a substitute for net revenues
determined in accordance with GAAP, and should not be considered in
isolation or as a substitute for analysis of the Company’s results
as reported under GAAP, nor is it necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. Management believes that this non-GAAP supplemental
information will be helpful in understanding the Company’s ongoing
operating results. 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.
EST. Interested parties may participate in the call by dialing
(888) 471-3843. Please call in 10 minutes before the call is
scheduled to begin and ask for the MTR Gaming call (conference ID #
3671718).
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 EST on Tuesday, November 12, 2013
at www.mtrgaming.com and by telephone at (877) 870-5176; passcode
3671718.
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, 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 Nine Months Ended September
30 September 30 2013 2012 2013
2012 Revenues: Gaming $ 115,268 $ 132,020 $ 349,223 $
339,664 Pari-mutuel commissions 4,133 3,824 8,932 8,347 Food,
beverage and lodging 11,255 11,105 31,551 27,765 Other
3,791 3,583
9,582 8,141 Total
revenues 134,447 150,532 399,288 383,917 Less promotional
allowances
(5,584 )
(4,955 ) (16,321
) (12,715 ) Net
revenues
128,863
145,577 382,967
371,202 Operating expenses: Costs
of operating departments: Gaming Operating 68,089 76,420 204,624
203,988 Other regulatory assessments (16 ) 210 (279 ) 18
Pari-mutuel commissions 3,703 3,831 8,931 8,746 Food, beverage and
lodging 8,614 8,604 24,409 21,112 Other 2,679 2,358 6,519 5,596
Marketing and promotions 4,187 4,986 11,948 10,325 General and
administrative 16,351 17,799 48,861 46,119 Strategic transaction
costs 2,723 - 2,723 - Project opening costs - 222 - 2,718
Depreciation 7,691 7,880 22,782 19,979 Loss (gain) on the sale or
disposal of property
161
- 68
(4 ) Total operating expenses
114,182 122,310
330,586 318,597
Operating income 14,681 23,267 52,381 52,605
Other income (expense): Interest income 4 25 26 159 Interest
expense
(17,393 )
(17,227 ) (52,176
) (50,642 )
(Loss) income from continuing operations before income taxes (2,708
) 6,065 231 2,122 Provision for income taxes
(921 ) (729
) (2,260 )
(2,077 ) (Loss) income from
continuing operations (3,629
) 5,336
(2,029 )
45 Discontinued operations: Loss
from discontinued operations before income taxes - (23 ) - (278 )
Provision for income taxes
-
- -
- Loss from discontinued operations
- (23 )
- (278 )
Net (loss) income $
(3,629 )
$ 5,313
$ (2,029
) $
(233 ) Net (loss)
income per share - basic: (Loss) income from continuing
operations $ (0.13 ) $ 0.19 $ (0.07 ) $ - Loss from discontinued
operations
$ - $
- $ -
$ (0.01 ) Net (loss) income
$ (0.13 ) $
0.19 $ (0.07
) $ (0.01 )
Net (loss) income per share - diluted: (Loss) income
from continuing operations $ (0.13 ) $ 0.19 $ (0.07 ) $ - Loss from
discontinued operations
$ -
$ - $ -
$ (0.01 ) Net (loss)
income
$ (0.13 )
$ 0.19 $
(0.07 ) $ (0.01
) Weighted average number of shares
outstanding: Basic
28,379,199
28,047,046 28,234,350
27,997,360 Diluted
28,379,199 28,416,008
28,234,350
28,322,893
(a) The classification of costs related to discretionary coupons
previously reported within marketing and promotions has been
revised to report such costs as a component of promotional
allowances for the 2013 and 2012 periods presented. The revision is
not material to our financials statements, as the net effect of the
revision did not impact our operating income, net income,
stockholders' equity, cash flows or Adjusted EBITDA.
MTR GAMING GROUP, INC. SELECTED FINANCIAL INFORMATION
(dollars in thousands) (unaudited)
Three Months Ended Nine Months Ended
September 30 September 30 2013 2012
2013 2012 Net revenues: Mountaineer
Casino, Racetrack & Resort $ 50,606 $ 56,467 $ 151,507 $
172,961 Presque Isle Downs & Casino 42,038 47,452 121,706
143,835 Scioto Downs 36,219 41,658 109,754 54,373 Corporate
- -
- 33 Consolidated
net revenues $ 128,863
$ 145,577
$ 382,967
$ 371,202
Adjusted EBITDA from continuing operations:
Mountaineer Casino, Racetrack & Resort $ 9,682 $ 11,229 $
27,858 $ 36,311 Presque Isle Downs & Casino 6,199 8,569 19,857
29,284 Scioto Downs 11,641 15,065 37,218 16,042 Corporate
(5,005 ) (3,506
) (9,981 )
(9,039 )
Consolidated Adjusted EBITDA from
continuing operations
$ 22,517 $ 31,357 $
74,952 $ 72,598 Adjusted EBITDA from
discontinued operations
-
(23 ) -
(278 ) Consolidated Adjusted
EBITDA $ 22,517
$ 31,334
$ 74,952
$ 72,320
_______________________________________________________________________
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 Nine Months Ended
September 30 September 30 2013 2012
2013 2012 Adjusted EBITDA:
Mountaineer Casino, Racetrack & Resort: Net income $
7,452 $ 8,469 $ 21,210 $ 27,941 Interest income - - (2 ) - Benefit
for income taxes - (13 ) - (13 ) Depreciation 2,251 2,773 6,701
8,388 Gain on the sale or disposal of property
(21 ) -
(51 ) (5
) Adjusted EBITDA $
9,682 $ 11,229
$ 27,858 $
36,311 Net revenues $
50,606 $ 56,467
$ 151,507 $
172,961 Adjusted EBITDA margin
19.1 %
19.9 %
18.4 %
21.0 % Presque
Isle Downs & Casino: Net income $ 3,373 $ 5,824 $ 12,294 $
20,337 Interest income and capitalized interest (1 ) (12 ) (2 ) (41
) Provision for income taxes 621 608 1,862 1,861 Depreciation 2,040
1,939 5,863 7,108 Other regulatory gaming assessments (16 ) 210
(279 ) 18 Loss on the sale or disposal of property
182 -
119 1 Adjusted
EBITDA $ 6,199 $
8,569 $ 19,857
$ 29,284 Net revenues
$ 42,038 $
47,452 $ 121,706
$ 143,835 Adjusted
EBITDA margin 14.7
% 18.1
% 16.3
% 20.4
% MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (continued) (dollars in
thousands) (unaudited) Three Months Ended
Nine Months Ended September 30 September 30
2013 2012 2013 2012 Adjusted EBITDA
(continued): Scioto Downs: Net income $ 7,942 $
11,901 $ 25,968 $ 12,593 Interest expense (capitalized interest) 22
(107 ) 61 (1,227 ) Provision for income taxes 287 113 997 227
Depreciation
3,390
3,158 10,192
4,449 Adjusted EBITDA $
11,641 $ 15,065
$ 37,218 $
16,042 Net revenues $
36,219 $ 41,658
$ 109,754 $
54,373 Adjusted EBITDA margin
32.1 %
36.2 %
33.9 %
29.5 %
Corporate: Net loss $ (22,396 ) $ (20,858 ) $ (61,501 ) $
(60,826 ) Interest expense, net of interest income 17,368 17,321
52,093 51,751 Provision (benefit) for income taxes 13 21 (599 ) 2
Depreciation
10 10
26 34
Adjusted EBITDA $ (5,005
) $ (3,506 )
$ (9,981 ) $
(9,039 ) Discontinued
operations: Net loss $ - $ (23 ) $ - $ (278 ) Provision for
income taxes
- -
- -
Adjusted EBITDA $ -
$ (23 ) $
- $ (278
) MTR Gaming Group, Inc. (consolidated):
Net (loss) income $ (3,629 ) $ 5,313 $ (2,029 ) $ (233 ) Interest
expense, net of interest income and capitalized interest 17,389
17,202 52,150 50,483 Provision for income taxes 921 729 2,260 2,077
Depreciation 7,691 7,880 22,782 19,979 Other regulatory gaming
assessments (16 ) 210 (279 ) 18 Loss (gain) on the sale or disposal
of property
161 -
68 (4
) Consolidated Adjusted EBITDA $
22,517 $ 31,334
$ 74,952 $
72,320 Net revenues $
128,863 $ 145,577
$ 382,967 $
371,202 Adjusted EBITDA margin
17.5 %
21.5 %
19.6 %
19.5 % MTR GAMING
GROUP, INC. CONSOLIDATED BALANCE SHEETS (dollars in
thousands) September 30 December 31
2013 2012 (unaudited) ASSETS
Current assets: Cash and cash equivalents $ 86,075 $ 115,113
Restricted cash 4,064 4,088 Accounts receivable, net of allowance
for doubtful accounts of $213 in 2013 and $350 in 2012 5,192 3,934
Amounts due from West Virginia Lottery Commission - 17 Inventories
4,345 4,305 Deferred financing costs 1,642 1,642 Prepaid expenses
and other current assets
8,240
5,582 Total current assets 109,558 134,681
Property and equipment, net 375,749 387,015 Other intangible
assets 136,116 136,094 Deferred financing costs, net of current
portion 7,176 8,407 Deposits and other 1,918 1,908 Non-operating
real property 10,789 10,789 Assets of discontinued operations
181 181 Total
assets
$ 641,487 $
679,075 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable $ 3,883 $
3,719 Accounts payable - gaming taxes and assessments 9,017 11,077
Accrued payroll and payroll taxes 6,440 5,776 Accrued interest
10,937 27,369 Accrued income taxes 273 743 Other accrued
liabilities 17,128 13,579 Construction project and equipment
liabilities 38 481 License fee payable - 25,000 Deferred income
taxes 1,472 1,472 Liabilities of discontinued operations
116 123 Total
current liabilities 49,304 89,339 Long-term debt 558,305
556,716 Other regulatory gaming assessments 4,714 5,319 Long-term
compensation 695 871 Deferred income taxes 15,176 12,620 Other
long-term liabilities
514
517 Total liabilities
628,708 665,382
Stockholders' equity: Common stock - - Additional paid-in
capital 64,905 63,822 Accumulated deficit (52,041 ) (50,012 )
Accumulated other comprehensive loss
(309
) (341 ) Total
stockholders' equity of MTR Gaming Group, Inc. 12,555 13,469
Non-controlling interest of discontinued operations
224 224 Total
stockholders' equity
12,779
13,693 Total liabilities and stockholders'
equity
$ 641,487 $
679,075
For Additional Information, Please Contact:MTR Gaming
Group, Inc.www.mtrgaming.comJohn W.
Bittner, Jr., 724-933-8122Executive Vice President and Chief
Financial OfficerJbittner@mtrgaming.com
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