Penn National Gaming Updates Timing for Restatement of Financial Statements & Reiterates 2015 Fourth Quarter & Full Year Guid...
December 30 2015 - 7:00AM
Business Wire
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or
the “Company”) provided an update today on the expected timing for
the filing with the Securities and Exchange Commission (“SEC”) of
the restatement of its financial statements filed since the
spin-off (the “Spin-off”) of its real estate assets to Gaming and
Leisure Properties, Inc. (“GLPI”) on November 1, 2013 (the
“Restatement”). Penn National now expects to submit the restated
filings by no later than February 29, 2016, the date by which its
audited financial statements for the year-ended December 31, 2015
are due.
As previously disclosed, the Restatement arose from the
Company’s change in the classification of its Master Lease (the
“Master Lease”) with GLPI from an operating lease to a financing
obligation. The updated timing for the submission of the restated
filings reflects an ongoing review undertaken in connection with
the Restatement. While this review is ongoing, the Company
currently expects to make adjustments to its previously recorded
2014 and 2013 goodwill and intangible asset impairment charges, to
report the fees paid to relocate its Ohio racetracks as an
indefinite lived intangible asset as opposed to a depreciating
asset, and to report Hollywood Casino Baton Rouge and Hollywood
Casino Perryville, which were spun off to GLPI, as discontinued
operations.
The Company’s cash flows for all prior and future periods will
not be affected by any of the above-noted changes in accounting,
nor will its current tax treatment with respect to the Spin-off
transaction. In addition, the adjustments in the Restatement will
have no impact on the following indicators of the Company’s
performance:
- the Company’s cash position;
- the Company’s leverage ratios under its
senior credit facility and other debt instruments (as the terms of
those obligations require the Master Lease to be treated as an
operating lease regardless of the treatment required under
GAAP);
- the Company’s revenues from continuing
operations; or
- the Company’s rental payments or other
obligations under the Master Lease.
As previously disclosed, the Company also anticipates that, as a
result of the change in lease classification, it will report
additional liabilities which represent the present value of the
future minimum lease payments to GLPI under the Master Lease. The
Company approximates this liability will amount to $3.58 billion as
of September 30, 2015.
On November 13, 2015, the Company disclosed that it received a
notice from The Nasdaq Stock Market (“NASDAQ”) that it is not in
compliance with NASDAQ Listing Rule 5250(c)(1) because the Company
did not file its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2015 in a timely manner. Penn National also
confirmed today that it will submit a plan to regain compliance
with NASDAQ listing requirements by January 8, 2016. This plan is
expected to extend compliance for an additional 180 days. Further,
the Company is currently in discussions with its lenders under the
Company’s senior secured credit facility to secure a waiver to
further extend the period for the Company to file its financial
statements for the quarter ended September 30, 2015.
Reiterates 2015 Fourth Quarter and Full Year Guidance
Penn National also announced today that, based on the
performance of the business to date in the fourth quarter of 2015,
it is reiterating the Company’s 2015 fourth quarter and full year
financial guidance initially provided on October 22, 2015. The
Company continues to expect that net revenues and Adjusted EBITDA
for the three months ending December 31, 2015 will be $722.5
million and $181.6 million, respectively. For the full year ending
December 31, 2015, the Company expects to report net revenues of
$2,786.3 million and Adjusted EBITDA of $754.5 million.
About Penn National Gaming, Inc.
Penn National owns, operates or has ownership interests in
gaming and racing facilities and video gaming terminal operations
with a focus on slot machine entertainment. At September 30, 2015,
the Company operated twenty-seven facilities in seventeen
jurisdictions, including Florida, Illinois, Indiana, Kansas, Maine,
Massachusetts, Maryland, Mississippi, Missouri, Nevada, New Jersey,
New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario.
At September 30, 2015, in aggregate, Penn National operated
approximately 34,000 gaming machines, 800 table games and 4,600
hotel rooms.
Forward-looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by the use of forward
looking terminology such as “expects,” “believes,” “estimates,”
“projects,” “intends,” “plans,” “seeks,” “may,” “will,” “should” or
“anticipates” or the negative or other variations of these or
similar words. Although the Company believes that our expectations
are based on reasonable assumptions within the bounds of our
knowledge of our business, there can be no assurance that actual
results, including the impact of the Restatement, will not differ
materially from our expectations. Meaningful factors that could
cause actual results to differ from expectations include, but are
not limited to, risks relating to the final impact of the
Restatement on the Company’s financial statements; the impact of
the Restatement on the Company’s evaluation of the effectiveness of
its internal control over financial reporting; delays in the
preparation of the financial statements; the risk that the Company
will not be able to file its periodic reports with the Securities
and Exchange Commission by the deadlines imposed by the NASDAQ
listing requirements; the risk that additional information will
come to light during the course of the preparation of restated
financial statements that alters the scope or magnitude of the
Restatement; potential reviews, litigation or other proceedings by
governmental authorities, stockholders or other parties; the risk
that the Company will be unable to obtain any required waivers
under the Company’s senior credit facility or its note indenture
with respect to a significant delay in filing periodic reports with
the Securities and Exchange Commission and the associated risk of
additional incidental interest expense; the risk that the Company
will not achieve its fourth quarter and full year guidance due to
changes in our expected operating performance or due to one-time
non-operational charges; risks relating to our liquidity and
ability to raise capital; risks related to the impact on the
Restatement on the Company’s reputation, development projects,
joint ventures and other material commercial contracts; and other
factors as discussed in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2014,
subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, each as filed with the United States Securities
and Exchange Commission. The Company does not intend to update
publicly any forward-looking statements except as required by law.
In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not
occur.
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version on businesswire.com: http://www.businesswire.com/news/home/20151230005048/en/
Penn National Gaming, Inc.Saul V. Reibstein, 610-401-2049Chief
Financial OfficerorJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
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