Retail Operations Benefitting from Strong
Volumes and Meaningful Database Growth
Interactive Segment Continues to Deliver
Disciplined Growth, Highlighted by the Successful Launch of the
Barstool Sportsbook in Louisiana and theScore Bet in
Ontario
Raising 2022 Full Year Revenue and Adjusted
EBITDAR Guidance
Repurchased $175.1 Million of Common
Stock Under Share Repurchase Authorization
Penn National Gaming, Inc. (Nasdaq: PENN) (“Penn” or the
“Company”) today reported financial results for the three months
ended March 31, 2022.
2022 First Quarter Financial Highlights:
- Revenues of $1.56 billion, an increase of 22.7%
year-over-year;
- Net income of $51.6 and net income margin of 3.3%, as
compared to net income of $90.9 million and net income margin of
7.1% in the prior year;
- Adjusted EBITDAR of $494.7 million, an increase of 10.7%
year-over-year;
- Adjusted EBITDA of $434.6 million, an increase of 29.1%
year-over-year; and
- Adjusted EBITDAR margins of 31.6%, a decline of 344bps
year-over-year.
For further information, the Company has posted a presentation
to its website regarding the first quarter highlights and
accomplishments, which can be found here.
Jay Snowden, President and Chief Executive Officer, commented:
“Penn National Gaming generated record first quarter results with
revenues of $1.56 billion and Adjusted EBITDAR of $494.7 million.
These results reflect our continued progress in meeting our
strategic objectives. We are growing our active mychoice®
database and are seeing early benefits from our technology
investments. We are also driving momentum at our Interactive
Segment with ongoing sports betting and iCasino growth in the U.S.,
and the successful launch of mobile sports betting and iCasino in
Ontario on April 4th on theScore’s proprietary player account
management system (“PAM”) and bonusing engine. Based on the
strength of our first quarter performance and our outlook for the
remainder of the year, we are increasing our prior 2022 revenue and
Adjusted EBITDAR guidance range to $6.15 billion to $6.55 billion
and $1.875 billion to $2.00 billion, respectively.
Strong Property Level Performance Across all Segments
Supported by Active Database Growth
Property level highlights1:
- Revenues of $1.42 billion;
- Adjusted EBITDAR of $528.4 million;
- Adjusted EBITDAR margins of 37.1%;
- Older core demographics are re-engaging with increased
visitation levels and spend per guest;
- Rational and stable marketing and promotional environment in
most markets leading to lower company-wide reinvestment rates;
and
- Q1 2022 demand trends continue in Q2 2022 to date.
“We remain encouraged by the ongoing visitation from younger
demographics and are focused on continuing to reimagine our
properties and offerings to enhance the entertainment appeal to
this steadily growing segment of consumers,” said Mr. Snowden. “Our
database grew across all worth segments by 14%, led by 28%
year-over-year growth in our VIP segment and 11% in our core
segments driven by our new online and retail sportsbook offerings
and our recently opened Hollywood Casino York and Morgantown
casinos in Pennsylvania. We are also starting to see the early
benefits of our investment in our cashless, cardless and
contactless technology (the “3C’s”), which powers our
mywallet experience. This technology is now live at nine
properties in three states and has increased the value of the guest
in terms of visitation frequency and time on device. We plan to
introduce the 3C’s in an additional 14 properties in eight states
over the next two quarters pending regulatory approval.”
Disciplined Growth for our Interactive Segment
Interactive Segment highlights:
- Revenues of $141.5 million;
- Adjusted EBITDA loss of $10.0 million; and
- Successful launch of the Barstool Sportsbook mobile app in
Louisiana on January 28, and theScore Bet mobile app in Ontario on
April 4, 2022.
“The Interactive Segment generated meaningful growth year over
year and our profitability objectives are unchanged. Our launches
in Louisiana and Ontario have demonstrated the value of both our
omni-channel strategy and our investment in new technology. In
Louisiana, we benefited from both our best-in-class regional
casinos and grass-roots marketing by Barstool Sports personalities.
In Ontario, we successfully launched theScore Bet mobile app on
April 4th to impressive demand. Additionally, theScore Bet launched
on theScore’s cutting edge PAM and bonus engine, which allows us to
provide highly-customized features and seamless integration into
theScore media app. Although early, we have been very encouraged by
the results. In Q3 2022, we expect to transition theScore Bet in
Ontario to theScore’s proprietary risk and trading platform, which
will allow us to significantly bolster the product’s features and
capabilities, including expanded betting markets and exclusive bet
features. We also remain on track to transition the Barstool
Sportsbook to theScore’s PAM and trading platform in Q3 2023, which
will provide meaningful cost and revenue synergy
opportunities.”
________________________ 1 Property level consists of retail
operating segments which are composed of the operating results of
our Northeast, South, West, and Midwest reportable segments.
Media Business Provides Solid Platform for Additional
Monetization Opportunities
Mr. Snowden continued, “Our media business is building momentum,
as theScore grew revenue 42.0% year over year in Q1 2022 and
continues to garner high levels of engagement. Barstool Sports Inc.
has also continued to expand its audience and reach while pursuing
new growth opportunities. On March 18th, the second stand-alone
Barstool sports bar opened in Philadelphia to high demand. In
addition, on May 7th, Barstool will broadcast an alternative
commentary to the Canelo v. Bivol boxing match on DAZN,
representing another extension of the Barstool brand into live
sporting events. Looking forward, we believe there is upside for
the media business as we begin to realize the benefits of cross
promotion with Barstool Sports and additional monetization
opportunities.”
ESG – Continuing to Care for our People, our Communities and
our Planet
On April 26th, the Company released its 2021 Corporate Social
Responsibility Report, providing insights into Penn National
Gaming’s longstanding commitment to Care for our People, our
Communities and the Planet. Highlights include the launch of a $4
million STEM Scholarship Fund and internship program at
historically black colleges and universities in states in which
Penn operates. Penn also contributed more than $7 million to help
fund COVID-19 and hurricane relief efforts, in addition to
supporting worthwhile charities and civic organizations in the
communities in which it operates — a two-fold increase over
2019.
More recently, on March 23rd, Penn executives hosted Louisiana
Governor John Bel Edwards and other dignitaries at the annual
Metanoia Gala at L’Auberge Casino & Hotel in Baton Rouge to
raise funds to support adolescent victims of human trafficking.
Penn also held several events in appreciation of Woman’s History
month, including a “Women Behind theScore Bet” virtual panel to
recognize the critical role our female team members played in the
development of theScore Bet app.
Share Repurchase Authorization Update
During the three months ended March 31, 2022, the Company
repurchased 3,802,408 shares of its common stock in open market
transactions for $175.1 million at an average price of $46.04 per
share. There is $574.9 million remaining under our $750.0 million
authorization.
Liquidity Remains Strong
Total liquidity as of March 31, 2022 was $2.48 billion inclusive
of $1.81 billion in cash and cash equivalents. Total net debt as of
the end of the quarter was $923.5 million, an increase of $37.3
million from December 31, 2021 due to a lower cash balance as we
executed on our share repurchase program. Lease-adjusted net
leverage as of March 31, 2022 was 4.04x compared to 4.10x as of
December 31, 2021.
On May 3, 2022, the Company entered into a Second Amended and
Restated Credit Agreement with its various lenders (the “Second
Amended and Restated Credit Agreement”). The Second Amended and
Restated Credit Agreement provides for a $1.0 billion revolving
credit facility, undrawn at close, (the “Revolving Credit
Facility”), a five-year $550.0 million term loan A facility (the
“Term Loan A”) and a seven-year $1.0 billion term loan B facility
(the “Term Loan B”) facilities (together, the “Credit Facilities”).
The proceeds from the Credit Facilities were used to repay the
existing term loan A facility and term loan B-1 facility
balances.
Additional information on Penn’s reported results, including a
reconciliation of the non-GAAP results to their most comparable
GAAP measures, is included in the financial tables below. The
Company does not provide a reconciliation of projected Adjusted
EBITDA and Adjusted EBITDAR because it is unable to predict with
reasonable accuracy the value of certain adjustments that may
significantly impact the Company’s results, including realized and
unrealized gains and losses on equity securities, re-measurement of
cash-settled stock-based awards, contingent purchase payments
associated with prior acquisitions, and income tax expense
(benefit), which are dependent on future events that are out of the
Company’s control or that may not be reasonably predicted.
Summary of First Quarter Results
For the three months
ended
March 31,
(in millions,
except per share data, unaudited)
2022
2021
Revenues
$
1,564.2
$
1,274.9
Net income
$
51.6
$
90.9
Adjusted EBITDA (1)
$
434.6
$
336.6
Rent expense associated with triple net
operating leases (2)
60.1
110.4
Adjusted EBITDAR (1)
$
494.7
$
447.0
Payments to our REIT Landlords under
Triple Net Leases (3)
$
229.3
$
226.0
Diluted earnings per common
share
$
0.29
$
0.55
(1)
See the “Non-GAAP Financial
Measures” section below for more information as well as the
definitions of Adjusted EBITDA and Adjusted EBITDAR. Additionally,
see below for reconciliations of these Non-GAAP financial measures
to their GAAP equivalent financial measure.
(2)
Consists of the operating lease
components contained within our triple net master lease dated
November 1, 2013 with Gaming and Leisure Properties, Inc. (Nasdaq:
GLPI) ("GLPI") and the triple net master lease assumed in
connection with our acquisition of Pinnacle Entertainment, Inc.
(individually referred to as the Penn Master Lease and Pinnacle
Master Lease, respectively, and are collectively referred to as our
“Master Leases”), as well as our individual triple net leases with
GLPI for the real estate assets used in the operation of Tropicana
Las Vegas Hotel and Casino, Inc. and Hollywood Casino at Meadows
Racetrack, and our individual triple net leases with VICI
Properties Inc. (NYSE: VICI) ("VICI") for the real estate assets
used in the operations of Margaritaville Casino Resort and
Greektown Casino-Hotel (referred to collectively as our “triple net
operating leases”).
On January 14, 2022, the Company
and GLPI amended certain terms of Master Leases which was concluded
to be a lease modification under Accounting Standards Codification
Topic 842, “Leases.” As a result of lease modification events, only
the land and building components associated with the operations of
Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning
Valley Race Course are classified as operating leases which is
recorded to rent expense, as compared to prior to the lease
modification events, whereby the land components of substantially
all of the Master Lease properties were classified as operating
leases and recorded to rent expense. Subsequent to the lease
modification events, the land components associated with the
properties are primarily classified as finance leases.
(3)
Consists of payments made to GLPI
and VICI (referred to collectively as our “REIT Landlords”) under
the Master Leases, the Perryville Lease (effective July 1, 2021),
the Meadows Lease, the Margaritaville Lease, the Greektown Lease
and the Morgantown Lease. Although we collectively refer to the
Master Leases, the Perryville Lease, the Meadows Lease, the
Margaritaville Lease, the Greektown Lease, the Morgantown Lease and
the Tropicana Lease as our “Triple Net Leases,” the rent under the
Tropicana Lease is nominal.
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Segment Information
The Company aggregates its properties into
five reportable segments: Northeast, South, West, Midwest, and
Interactive.
For the three months
ended
March 31,
(in millions,
unaudited)
2022
2021
Revenues:
Northeast segment (1)
$
658.5
$
570.9
South segment (2)
341.4
295.9
West segment (3)
140.9
96.6
Midwest segment (4)
282.9
234.7
Interactive (5)
141.5
86.3
Other (6)
7.3
1.6
Intersegment eliminations (7)
(8.3
)
(11.1
)
Total revenues
$
1,564.2
$
1,274.9
Adjusted EBITDAR:
Northeast segment (1)
$
205.2
$
193.2
South segment (2)
146.5
133.9
West segment (3)
51.2
35.2
Midwest segment (4)
125.5
106.0
Interactive (5)
(10.0
)
1.3
Other (6)
(23.7
)
(22.6
)
Total Adjusted EBITDAR (8)
$
494.7
$
447.0
(1)
The Northeast segment consists of
the following properties: Ameristar East Chicago, Greektown
Casino-Hotel, Hollywood Casino Bangor, Hollywood Casino at Charles
Town Races, Hollywood Casino Columbus, Hollywood Casino
Lawrenceburg, Hollywood Casino Morgantown (opened December 22,
2021), Hollywood Casino at Penn National Race Course, Hollywood
Casino Perryville (acquired July 1, 2021), Hollywood Casino Toledo,
Hollywood Casino York (opened August 12, 2021), Hollywood Gaming at
Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course,
Marquee by Penn, Hollywood Casino at Meadows Racetrack, and
Plainridge Park Casino.
(2)
The South segment consists of the
following properties: 1st Jackpot Casino, Ameristar Vicksburg,
Boomtown Biloxi, Boomtown Bossier City, Boomtown New Orleans,
Hollywood Casino Gulf Coast, Hollywood Casino Tunica, L’Auberge
Baton Rouge, L’Auberge Lake Charles, and Margaritaville Resort
Casino.
(3)
The West segment consists of the
following properties: Ameristar Black Hawk, Cactus Petes and
Horseshu, M Resort, Tropicana Las Vegas Hotel and Casino, and Zia
Park Casino.
(4)
The Midwest segment consists of
the following properties: Ameristar Council Bluffs; Argosy Casino
Alton; Argosy Casino Riverside; Hollywood Casino Aurora; Hollywood
Casino Joliet; our 50% investment in Kansas Entertainment, which
owns Hollywood Casino at Kansas Speedway; Hollywood Casino St.
Louis; Prairie State Gaming; and River City Casino.
(5)
The Interactive segment includes
Penn Interactive, which operates social gaming, our
internally-branded retail sportsbooks, iGaming and our Barstool
Sportsbook mobile app, as well as the operating results of
theScore, which was acquired on October 19, 2021. Interactive
revenues are inclusive of a tax gross-up of $50.3 million and $39.4
million for the three months ended March 31, 2022 and 2021,
respectively. In addition, Adjusted EBITDAR of the Interactive
segment includes our proportionate share of the net income or loss
of Barstool Sports, Inc. after adding back our share of
non-operating items (such as interest expense, net; income taxes;
depreciation and amortization; and stock-based compensation
expense).
(6)
The Other category consists of
the Company’s stand-alone racing operations, namely Sanford-Orlando
Kennel Club, Sam Houston and Valley Race Parks (the remaining 50%
was acquired by Penn on August 1, 2021), the Company’s JV interests
in Freehold Raceway and our management contract for Retama Park
Racetrack. Expenses incurred for corporate and shared services
activities that are directly attributable to a property or are
otherwise incurred to support a property are allocated to each
property. The Other category also includes corporate overhead
costs, which consist of certain expenses, such as: payroll,
professional fees, travel expenses and other general and
administrative expenses that do not directly relate to or have not
otherwise been allocated to a property.
(7)
Primarily represents the
elimination of intersegment revenues associated with our
internally-branded retail sportsbooks, which are operated by Penn
Interactive.
(8)
As noted within the “Non-GAAP
Financial Measures” section below, Adjusted EBITDAR is presented on
a consolidated basis outside the financial statements solely as a
valuation metric or for reconciliation purposes.
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Reconciliation of Comparable
GAAP Financial Measure to Adjusted EBITDA,
Adjusted EBITDAR, and Adjusted
EBITDAR Margin
For the three months
ended
March 31,
(in millions,
unaudited)
2022
2021
Net income
$
51.6
$
90.9
Income tax expense
47.6
20.6
Income from unconsolidated affiliates
(8.7
)
(9.6
)
Interest expense, net
160.8
135.7
Other (income) expenses
40.7
(21.1
)
Operating income
292.0
216.5
Stock-based compensation
17.0
4.2
Cash-settled stock-based awards
variance
(2.9
)
21.5
Gain on disposal of assets
(0.1
)
(0.1
)
Contingent purchase price
(0.1
)
0.1
Pre-opening expenses (1)
1.5
1.6
Depreciation and amortization
118.2
81.3
Insurance recoveries, net of deductible
charges
(8.8
)
—
Income from unconsolidated affiliates
8.7
9.6
Non-operating items of equity method
investments (2)
1.8
1.6
Other expenses (1) (3)
7.3
0.3
Adjusted EBITDA
434.6
336.6
Rent expense associated with triple net
operating leases
60.1
110.4
Adjusted EBITDAR
$
494.7
$
447.0
Net income margin
3.3
%
7.1
%
Adjusted EBITDAR margin
31.6
%
35.1
%
(1)
During the first quarter of 2021,
acquisition costs were included within pre-opening and acquisition
costs. Beginning with the quarter ended June 30, 2021, acquisition
costs are presented as part of other expenses.
(2)
Consists principally of interest
expense, net; income taxes; depreciation and amortization; and
stock-based compensation expense associated with Barstool Sports,
Inc. and our Kansas Entertainment, LLC joint venture. We record our
portion of Barstool Sports, Inc.'s net income or loss, including
adjustments to arrive at Adjusted EBITDAR, one quarter in
arrears.
(3)
Consists of non-recurring
acquisition and transaction costs and finance transformation costs
associated with the implementation of our new Enterprise Resource
Management system.
PENN NATIONAL GAMING, INC. AND
SUBSIDIARIES
Consolidated Statements of
Operations
For the three months
ended
March 31,
(in millions,
except per share data, unaudited)
2022
2021
Revenues
Gaming
$
1,291.2
$
1,082.0
Food, beverage, hotel and other
273.0
192.9
Total revenues
1,564.2
1,274.9
Operating expenses
Gaming
686.6
527.8
Food, beverage, hotel and other
171.9
123.1
General and administrative
295.5
326.2
Depreciation and amortization
118.2
81.3
Total operating expenses
1,272.2
1,058.4
Operating income
292.0
216.5
Other income (expenses)
Interest expense, net
(160.8
)
(135.7
)
Income from unconsolidated affiliates
8.7
9.6
Other
(40.7
)
21.1
Total other expenses
(192.8
)
(105.0
)
Income before income taxes
99.2
111.5
Income tax expense
(47.6
)
(20.6
)
Net income
51.6
90.9
Less: Net loss attributable to
non-controlling interest
0.1
0.1
Net income attributable to Penn
National Gaming
$
51.7
$
91.0
Earnings per share:
Basic earnings per share
$
0.31
$
0.58
Diluted earnings per share
$
0.29
$
0.55
Weighted-average common shares
outstanding—basic
168.2
155.7
Weighted-average common shares
outstanding—diluted
184.2
172.8
Selected Financial
Information
Balance Sheet Data
(in millions,
unaudited)
March 31,
2022
December 31,
2021
Cash and cash equivalents
$
1,805.5
$
1,863.9
Bank debt
$
1,543.2
$
1,563.7
Notes (1)
1,130.5
1,130.5
Other long-term obligations (2)
55.3
55.9
Total traditional debt
2,729.0
2,750.1
Financing obligation (3)
96.6
90.4
Less: Debt discounts and debt issuance
costs (4)
(31.8
)
(103.7
)
$
2,793.8
$
2,736.8
Traditional net debt (5)
$
923.5
$
886.2
(1)
Inclusive of our 5.625% Notes due
2027, 4.125% Notes due 2029 and our 2.75% Convertible Notes due
2026.
(2)
Other long-term obligations as of
March 31, 2022 primarily includes $44.5 million related to
relocation fees due for both Hollywood Gaming at Dayton Raceway and
Hollywood Gaming at Mahoning Valley Race Course, and $10.8 million
related to our repayment obligation on a hotel and event center
located near Hollywood Casino Lawrenceburg.
(3)
Represents cash proceeds received
and non-cash interest on certain claims of which the principal
repayment is contingent and classified as a financing obligation
under Accounting Standards Codification Topic 470, “Debt.”
(4)
On January 1, 2022, the Company
adopted ASU 2020-06, which resulted in a net $71.7 million
reclassification of the equity component originally recognized as a
debt discount under the previously bifurcated cash conversion
feature of the 2.75% convertible senior notes due May 2026. Under
ASU 2020-06, bifurcation for a cash conversion feature is no longer
permitted.
(5)
Traditional net debt in the table
above is calculated as “Total traditional debt,” which is the
principal amount of debt outstanding (excludes the financing
obligation associated with cash proceeds received and non-cash
interest on certain claims of which the principal repayment is
contingent) less “Cash and cash equivalents.”
Cash Flow Data
The table below summarizes
certain cash expenditures incurred by the Company.
For the three months
ended
March 31,
(in millions,
unaudited)
2022
2021
Cash payments to our REIT Landlords under
Triple Net Leases
$
229.3
$
226.0
Cash payments (refunds) related to income
taxes, net
$
1.0
$
(8.8
)
Cash paid for interest on traditional
debt
$
30.8
$
25.8
Capital expenditures
$
65.6
$
25.7
Non-GAAP Financial Measures
The Non-GAAP Financial Measures used in this press release
include Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBITDAR
margin. These non-GAAP financial measures should not be considered
a substitute for, nor superior to, financial results and measures
determined or calculated in accordance with GAAP.
We define Adjusted EBITDA as earnings before interest expense,
net; income taxes; depreciation and amortization; stock-based
compensation; debt extinguishment and financing charges; impairment
losses; insurance recoveries, net of deductible charges; changes in
the estimated fair value of our contingent purchase price
obligations; gain or loss on disposal of assets; the difference
between budget and actual expense for cash-settled stock-based
awards; pre-opening expenses; and other. Adjusted EBITDA is
inclusive of income or loss from unconsolidated affiliates, with
our share of non-operating items (such as interest expense, net;
income taxes; depreciation and amortization; and stock-based
compensation expense) added back for Barstool Sports, Inc.
(“Barstool Sports”) and our Kansas Entertainment, LLC joint
venture. Adjusted EBITDA is inclusive of rent expense associated
with our triple net operating leases (the operating lease
components contained within our triple net master lease dated
November 1, 2013 with Gaming and Leisure Properties, Inc. (Nasdaq:
GLPI) (“GLPI”) and the triple net master lease assumed in
connection with our acquisition of Pinnacle Entertainment, Inc.,
our individual triple net leases with GLPI for the real estate
assets used in the Operation of Tropicana Las Vegas Hotel and
Casino, Inc. and Hollywood Casino at Meadows Racetrack, and our
individual triple net leases with VICI Properties Inc. (NYSE: VICI)
(“VICI”) for the real estate assets used in the operations of
Margaritaville Casino Resort and Greektown Casino-Hotel). Although
Adjusted EBITDA includes rent expense associated with our triple
net operating leases, we believe Adjusted EBITDA is useful as a
supplemental measure in evaluating the performance of our
consolidated results of operations.
Adjusted EBITDA has economic substance because it is used by
management as a performance measure to analyze the performance of
our business, and is especially relevant in evaluating large,
long-lived casino-hotel projects because it provides a perspective
on the current effects of operating decisions separated from the
substantial non-operational depreciation charges and financing
costs of such projects. We present Adjusted EBITDA because it is
used by some investors and creditors as an indicator of the
strength and performance of ongoing business operations, including
our ability to service debt, and to fund capital expenditures,
acquisitions and operations. These calculations are commonly used
as a basis for investors, analysts and credit rating agencies to
evaluate and compare operating performance and value companies
within our industry. In order to view the operations of their
casinos on a more stand-alone basis, gaming companies, including
us, have historically excluded from their Adjusted EBITDA
calculations of certain corporate expenses that do not relate to
the management of specific casino properties. However, Adjusted
EBITDA is not a measure of performance or liquidity calculated in
accordance with GAAP. Adjusted EBITDA information is presented as a
supplemental disclosure, as management believes that it is a
commonly used measure of performance in the gaming industry and
that it is considered by many to be a key indicator of the
Company’s operating results.
We define Adjusted EBITDAR as Adjusted EBITDA (as defined above)
plus rent expense associated with triple net operating leases
(which is a normal, recurring cash operating expense necessary to
operate our business). Adjusted EBITDAR is presented on a
consolidated basis outside the financial statements solely as a
valuation metric. Management believes that Adjusted EBITDAR is an
additional metric traditionally used by analysts in valuing gaming
companies subject to triple net leases since it eliminates the
effects of variability in leasing methods and capital structures.
This metric is included as supplemental disclosure because (i) we
believe Adjusted EBITDAR is traditionally used by gaming operator
analysts and investors to determine the equity value of gaming
operators and (ii) Adjusted EBITDAR is one of the metrics used by
other financial analysts in valuing our business. We believe
Adjusted EBITDAR is useful for equity valuation purposes because
(i) its calculation isolates the effects of financing real estate;
and (ii) using a multiple of Adjusted EBITDAR to calculate
enterprise value allows for an adjustment to the balance sheet to
recognize estimated liabilities arising from operating leases
related to real estate. However, Adjusted EBITDAR when presented on
a consolidated basis is not a financial measure in accordance with
GAAP, and should not be viewed as a measure of overall operating
performance or considered in isolation or as an alternative to net
income because it excludes the rent expense associated with our
triple net operating leases and is provided for the limited
purposes referenced herein. Adjusted EBITDAR margin is defined as
Adjusted EBITDAR on a consolidated basis (as defined above) divided
by revenues on a consolidated basis. Adjusted EBITDAR margin is
presented on a consolidated basis outside the financial statements
solely as a valuation metric.
Each of these non-GAAP financial measures is not calculated in
the same manner by all companies and, accordingly, may not be an
appropriate measure of comparing performance among different
companies. See the table above, which presents reconciliations of
these measures to the GAAP equivalent financial measures.
Management Presentation, Conference Call, Webcast and Replay
Details
Penn is hosting a conference call and simultaneous webcast at
9:00 am ET today, both of which are open to the general public.
During the call, management will review an earnings presentation
that can be accessed at
https://pennnationalgaming.gcs-web.com/events-and-presentations/presentations.
The conference call number is 212-231-2939; please call five
minutes in advance to ensure that you are connected prior to the
presentation. Interested parties may also access the live call at
www.pngaming.com; allow 15 minutes to register and download and
install any necessary software. Questions and answers will be
reserved for call-in analysts and investors. A replay of the call
can be accessed for thirty days at www.pngaming.com.
This press release, which includes financial information to be
discussed by management during the conference call and disclosure
and reconciliation of non-GAAP financial measures, is available on
the Company’s web site, www.pngaming.com, in the “Investors”
section (select link for “Press Releases”).
About Penn National Gaming
Penn National Gaming, Inc. (Nasdaq: PENN) is North America’s
leading provider of integrated entertainment, sports content and
casino gaming experiences. A member of the S&P 500®, Penn
operates 44 properties in 20 states, online sports betting in 13
jurisdictions and iCasino in five under a portfolio of
well-recognized brands including Hollywood Casino®, L’Auberge®,
Barstool Sportsbook® and theScore Bet®. Penn’s highly
differentiated strategy, which is focused on organic cross-sell
opportunities, is reinforced by its investments in owned
technology, including a state-of-the-art media and betting platform
and an in-house iCasino content studio. The Company’s portfolio is
further bolstered by its industry-leading mychoice customer
loyalty program, which offers its over 25 million members a unique
set of rewards and experiences across business channels. Penn is
deeply committed to fostering a culture that welcomes a diverse set
of customers and dedicated team members. The Company has been
consistently ranked in the top two as “Employer of First Choice”
over the last nine years in the Bristol Associates-Spectrum
Gaming’s Executive Satisfaction Survey. In addition, as a
long-standing good corporate citizen, Penn is also committed to
being a trusted and valued member of its communities and a
responsible steward of our finite natural resources.
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 using forward-looking
terminology such as “expects,” “believes,” “estimates,” “projects,”
“intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” or
“anticipates” or the negative or other variations of these or
similar words, or by discussions of future events, strategies or
risks and uncertainties. Specifically, forward-looking statements
include, but are not limited to, statements regarding: the
Company's expectations of, and guidance regarding, future results
of operations and financial condition, including with respect to
its 2022 net revenues and Adjusted EBITDAR guidance ranges; the
assumptions provided regarding the guidance, including the scale
and timing of the Company’s product and technology investments; the
Company’s anticipated share repurchases; the Company's expectations
with regard to results, and the impact of competition, in online
sports betting, iGaming and retail/mobile sportsbooks, including
the expected results of theScore Bet in Ontario; the Company's
launch of its Interactive segment's products in new jurisdictions
and enhancements to existing Interactive segment products,
including the transition to theScore's proprietary risk and trading
platform in Ontario, the integration of the Barstool Sportsbook
into theScore mobile app in the U.S., and the migration of the
Barstool Sportsbook to theScore's player account management trading
platforms; the Company's expectations with regard to its future
investments in Barstool Sports and the future success of its
products; the Company's expectations with respect to the
integration and synergies related to the Company's integration of
theScore and Barstool Sports; The Company’s expectations with
respect to the ongoing introduction and the potential benefits of
the cashless, cardless and contactless (the “3C’s”) technology; the
Company's development projects; and the timing, cost and expected
impact of planned capital expenditures on the Company's results of
operations.
Such statements are all subject to risks, uncertainties and
changes in circumstances that could significantly affect the
Company’s future financial results and business. Accordingly, the
Company cautions that the forward-looking statements contained
herein are qualified by important factors that could cause actual
results to differ materially from those reflected by such
statements. Such factors include: the effects of economic
conditions and market conditions in the markets in which the
Company operates; competition with other entertainment, sports
content, and casino gaming experiences; the timing, cost and
expected impact of product and technology investments; risks
relating to international operations, permits, licenses,
financings, approvals and other contingencies in connection with
growth in new or existing jurisdictions; and additional risks and
uncertainties described in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2021, subsequent Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, each as filed with
the U.S. Securities and Exchange Commission. The Company does not
intend to update publicly any forward-looking statements except as
required by law. Considering these risks, uncertainties and
assumptions, the forward-looking events discussed in this press
release may not occur.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005391/en/
Felicia Hendrix Chief Financial Officer 610-373-2400
Joseph N. Jaffoni, Richard Land JCIR 212-835-8500 or
penn@jcir.com
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