FOR IMMEDIATE RELEASE
MTR GAMING
GROUP ANNOUNCES RECORD THIRD QUARTER EPS OF $.18 VS. $.10
Profitability
Up Sharply at West Virginia Operations
CHESTER, WV - November 9, 2000 - MTR Gaming Group, Inc. (Nasdaq National Market:MNTG)
today announced record financial results for the third quarter and nine
months ended September 30, 2000. See attached tables.
Third Quarter
Financial Highlights - versus fiscal 1999 third quarter
- Total revenues
increased 57% to $50.2 million.
- EBITDA was
up 51% to $9.8 million.
- Operating income
grew 59% to $8.2 million.
- Interest expense
decreased 38%.
- Net income
rose 92% to $5.0 million or $.18 per diluted share despite
the 12% increase in diluted shares from the third quarter
of 1999.
Nine-Month
Financial Highlights - versus the first nine months
of fiscal 1999
- Total revenues
were up 57% to $129.2 million.
- EBITDA rose
63% to $26.0 million.
- Operating income
increased 76% to $21.7 million.
- Interest expense
decreased 34%.
- Net income
grew 117% to $12.7 million or $.48 per diluted share despite
the 9% increase in diluted shares.
Net win from slot
operations at the Mountaineer Casino Racetrack and Resort
increased 52% to $40.6 million in the third quarter from
$26.7 million in the same period last year. Net win-per-day-per-machine
for the quarter rose 19% to $266 from $223, notwithstanding
the decrease in the net-win-per-day-per-machine from and
after the mid-August increase in slot machines from 1,355
to 1,905.
Edson R. (Ted)
Arneault, President and CEO of MTR Gaming Group, stated, "The
third quarter was a significant one for the Company. We launched
significantly expanded operations at Mountaineer Casino Racetrack and Resort, including a 32,000 square foot addition to the Speakeasy
Gaming Saloon that houses 550 slot machines. We also began
exporting live simulcasts of Mountaineer thoroughbred races,
which now generates an average daily handle of approximately
$350,000 from some 140 outlets and has reached a high handle
of more than $500,000. Additionally, we opened the new Harvey
E. Arneault Memorial Theatre and Events Center ("The
Harv") that has already hosted such performers as the
Three Sopranos, Paul Anka, Tony Bennett, Kenny Rogers and
Neil Sedaka, as well as HBO's popular KO Nation boxing event.
As expected, these
three essentially new businesses and revenue streams have
already proven to be major attractions for customers, and
in combination with our ongoing aggressive marketing campaigns,
are producing heightened consumer awareness and growing momentum
at our Mountaineer resort. It is important to note that the
expanded operations were introduced in the middle of the
third quarter and therefore did not have a full quarter's
impact on our financial results."
"During the
quarter we entered into a $60 million amended and restated
credit facility, which reduced our interest expense for the
current and future quarters, and provides us with the means
to continue to grow our business. Additionally, we were pleased
to list the Company's stock on the Nasdaq National Market,
moving from the Nasdaq SmallCap Market."
For the third
quarter of 2000, casino revenues at the Company's two Nevada
properties totaled $2.0 million while non-casino revenues
were $1.4 million, resulting in total revenues of $3.4 million,
a 17% increase from $2.9 million in the second quarter of
2000 (during the third quarter of 1999, the Company did not
operate gaming in Nevada). Despite the higher revenue levels,
the Nevada properties incurred a net loss of $1.9 million
or $.04 per diluted share, principally due to additional
marketing and food and beverage promotional costs incurred
by the startup of a bus marketing program.
Commenting on
the Nevada operations, Mr. Arneault stated, "The progress
at our Nevada properties has taken longer than originally
anticipated. In this regard, effective November 1, 2000 we
appointed Roger Szepelak as Vice President and Chief Operating
Officer of the Nevada subsidiaries where he will be responsible
for the day-to-day operations. Roger is a Las Vegas-trained
professional gaming executive with 12 years of direct experience
in the gaming industry, including serving as Vice President
and Assistant General Manager of Texas Station Gambling Hall
and Hotel and CFO of Rio Hotel and Casino, as well as experience
as a financial analyst.
Mr. Arneault concluded, "Our
outlook for the remainder of 2000 and beyond is positive.
We believe MTR now has the senior management, marketing team,
facilities and financial strength to pursue continued growth.
Due to MTR's prospects and our belief that the stock is undervalued,
during the third quarter, the Company repurchased 150,000
shares of its common stock for $986,000, bringing the total
repurchased pursuant to our previously announced buyback
program to 162,000 shares."
Conference
Call
Edson R. (Ted) Arneault, President and CEO of MTR Gaming
Group, will conduct a conference call focusing on the financial
results and the progress of the
Company's expansion in West Virginia at 10:00 a.m. ET on Thursday, November
9, 2000. Interested parties may participate in the call by dialing (212) 896-6048
approximately 10 minutes before the call is scheduled to begin. The conference
call will also be broadcast live over the Internet at www.vcall.com. Entering "MNTG" in
the search window will access a link to the call. To listen to the live call,
go to the web site at least 15 minutes early to register, download and install
any necessary audio software. If you are unable to listen live, the conference
call will be archived and can be accessed for approximately 90 days at www.vcall.com.
A recorded phone replay of the call will also be available from 12:00 noon
on Thursday, November 9, 2000 to 12:00 noon on Friday, November 10, 2000. Listeners
may dial 800-633-8284 and use the code 16898919 for the phone replay.
About MTR Gaming Group
MTR Gaming Group owns and operates the Mountaineer Casino Racetrack and Resort in Chester, West Virginia, which currently encompasses
a thoroughbred racetrack with off-track betting and export
simulcasting, 3,200 slot machines, 359 hotel rooms, golf course,
spa & fitness center, theater and events center, convention
center and fine dining and entertainment. The Company also
owns and operates the Ramada Inn and Speedway Casino in North
Las Vegas, and holds a license to build a new thoroughbred
racetrack with parimutuel wagering in Erie, Pennsylvania. MTR
is included on the Russell 2000® and Russell® 3000
Indexes. For more information, please visit www.mtrgaming.com.
Except for historical information, this
press release contains forward-looking statements concerning,
among other things, the acquisition of Scioto Downs, Inc.
Such statements are based on MTR’s current plans and
expectations. 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 are described in the Company’s
periodic reports filed with the Securities and Exchange Commission,
and with respect to the Scioto Downs acquisition are described
in the Merger Agreement, as amended, which is attached as
exhibits to the Company’s reports on Forms 8-K filed
December 24, 2002, March 5, 2003, and May 7, 2003. MTR’s
plans to build a racetrack in Erie, Pennsylvania remain subject
to the possibility of a legal challenge to the July 17, 2003
decision of the Pennsylvania State Horse Racing Commission
reinstating the license (which was originally granted in
late 2002) and the risks associated with land acquisition,development,
construction and integration of new operations. The Company
does not intend to update publicly any forward-looking statements,
except as may be required by law.
MTR
GAMING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
THREE
MONTHS ENDED
SEPTEMBER 30 |
NINE
MONTHS ENDED
SEPTEMBER 30 |
|
|
|
|
|
|
2000 |
1999 |
2000 |
1999 |
|
|
|
|
|
Revenues |
|
|
|
|
Gaming |
$42,648,000 |
$26,692,000 |
$111,061,000 |
$69,041,000 |
Parimutuel |
1,567,000 |
1,285,000 |
3,949,000 |
3,479,000 |
Food,
beverage and lodging |
4,574,000 |
3,214,000 |
11,557,000 |
7,705,000 |
Other |
1,448,000 |
816,000 |
2,614,000 |
2,063,000 |
|
|
|
|
|
Total
revenues |
50,237,000 |
32,007,000 |
129,181,000 |
82,288,000 |
|
|
|
|
|
Costs of revenue
|
|
|
|
|
Cost
of gaming terminals |
24,743,000
|
15,583,000 |
64,272,000 |
40,449,000 |
Cost
of parimutuel |
1,691,000
|
1,391,000 |
4,378,000 |
4,027,000 |
Cost
of food, beverage and lodging |
4,322,000 |
2,644,000 |
10,191,000 |
6,828,000 |
Cost
of other revenues |
1,365,000 |
970,000 |
2,351,000 |
1,898,000 |
|
|
|
|
|
Total cost
of revenues |
32,121,000 |
20,588,000 |
81,192,000 |
53,202,000 |
|
|
|
|
|
Gross Profit |
18,116,000 |
11,419,000 |
47,989,000 |
29,086,000 |
|
|
|
|
|
Selling, general and administrative
expenses:
|
|
|
|
|
Marketing
and promotions |
3,129,000 |
1,468,000 |
7,811,000 |
3,542,000 |
General
and administrative |
5,226,000 |
3,496,000 |
14,181,000 |
9,627,000 |
Depreciation
and amortization |
1,548,000 |
1,283,000 |
4,307,000 |
3,581,000 |
|
|
|
|
|
Total selling,
general and administrative
expenses |
9,903,000 |
6,247,000 |
26,299,000 |
16,750,000 |
|
|
|
|
|
Operating
income |
8,213,000 |
5,172,000 |
21,690,000 |
12,336,000 |
|
|
|
|
|
Interest
income |
64,000 |
57,000 |
200,000 |
213,000 |
Interest
expense |
(750,000) |
(1,210,000) |
(2,337,000) |
(3,556,000) |
|
|
|
|
|
|
(686,000) |
(1,153,000) |
(2,137,000) |
(3,343,000) |
|
|
|
|
|
Income
before income taxes |
7,527,000 |
4,019,000 |
19,553,000 |
8,993,000 |
Provision
for income taxes |
2,503,000 |
1,405,000 |
6,844,000 |
3,145,000 |
|
|
|
|
|
Net income |
$
5,024,000 |
$
2,614,000 |
$12,709,000 |
$
5,848,000 |
|
|
|
|
|
Net
income per share (basic)
Net income after income taxes |
$
0.23 |
$
0.12 |
$
0.59 |
$
0.28 |
Net
income per share (assuming dilution)
Net income after income taxes |
$
0. 18 |
$
0.10 |
$
0.48 |
$
0.24 |
Weighted average number of shares
outstanding:
|
|
|
|
|
Basic |
22,081,656 |
21,141,690 |
21,631,230 |
21,015,217 |
|
|
|
|
|
Diluted |
28,281,120 |
25,184,615 |
26,574,427 |
24,705,634 |
|
|
|
|
|
MTR GAMING
GROUP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
|
SEPTEMBER
30 |
DECEMBER
31 |
|
2000 |
1999 |
|
|
|
ASSETS |
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$11,870,000 |
$
7,380,000 |
Restricted
cash
|
509,000 |
891,000 |
Accounts
receivable net of allowance for doubtful accounts
of $48,000 and $41,000
|
3,443,000 |
1,026,000 |
Deferred
financing costs
|
541,000 |
244,000 |
Deferred
income taxes
|
1,228,000 |
1,526,000 |
Income
tax receivable
|
535,000 |
519,000 |
Other
current assets
|
2,932,000 |
1,575,000 |
|
|
|
Total current
assets |
21,058,000 |
13,161,000 |
|
|
|
Property
and equipment, net |
80,859,000 |
52,756,000 |
Other assets:
|
|
|
Excess
of cost of investments over net assets acquired,
net of Accumulated amortization of $1,967,000 and
$1,778,000 |
1,807,000 |
1,996,000 |
| Deferred
income taxes |
579,000 |
0 |
Deferred
financing costs, net of current portion |
1,986,000 |
977,000 |
Deposits
and other |
658,000 |
669,000 |
|
|
|
|
$106,947,000 |
$69,559,000 |
|
|
|
| LIABILITIES |
|
|
Current
liabilities: |
|
|
Accounts
payable |
$
444,000 |
$
1,453,000 |
Other
accrued liabilities |
6,081,000 |
1,746,000 |
Accrued
interest |
340,000 |
0 |
Current
deferred income taxes |
97,000 |
0 |
Current
portion of capital leases |
2,903,000 |
561,000 |
Current
portion of long-term debt |
153,000 |
7,982,000 |
|
|
|
Total current
liabilities |
10,018,000 |
11,742,000 |
|
|
|
Long-term
debt, less current portion |
49,388,000 |
26,409,000 |
Capital
lease obligations, net of current portion |
4,751,000 |
982,000 |
|
|
|
Deferred
income tax |
851,000 |
717,000 |
|
|
|
Total liabilities |
65,008,000 |
39,850,000 |
Shareholders' equity:
|
|
|
Common
Stock |
---- |
---- |
Paid in
capital
|
$37,482,000 |
$36,454,000 |
Shareholder
receivable |
(1,131,000) |
(457,000) |
Retained
Earnings (Accumulated deficit) |
5,588,000 |
(6,288,000) |
|
|
|
Total shareholders'
equity |
41,939,000 |
29,709,000 |
|
|
|
|
$
106,947,000 |
$69,559,000 |
|
|
|
|
