FOR IMMEDIATE RELEASE
MTR GAMING GROUP ANNOUNCES RECORD SECOND QUARTER RESULTS
CHESTER,
WV - August 7, 2001 - MTR Gaming Group, Inc. (Nasdaq National
Market:MNTG) today announced record financial results for the
second quarter ended June 30, 2001. See attached tables.
Second
Quarter Financial Highlights - versus fiscal 2000 second
quarter
- Total revenues increased 29% to $54.3 million.
- EBITDA was up 26% to $10.9 million.
- Operating income grew 18% to $8.6 million
- Net income rose 19% to $5.1 million or $.20 per diluted
share.
Six-Month Financial Highlights - versus the first six
months of fiscal 2000
- Total revenues were up 32% to $102.8 million
- EBITDA rose 27% to $20.6 million
- Operating income increased 22% to $16.3 million
- Net income grew 23% to $9.4 million or $.37 per diluted share
Edson R. (Ted) Arneault, President and CEO of MTR Gaming
Group, stated, "We are very pleased with the results we are seeing
from our expanded operations and aggressive marketing campaign
for Mountaineer. Net win from slot operations at Mountaineer increased
29% to $44.6 million in the second quarter from the second quarter
of 2000, while net win-per-day-per-machine was $261 with 1,905
machines, compared to $282 with 1,355 machines in the same period
of last year. Net win-per-day-per-machine was up from $240 in the
first quarter of this year."The current phase of Mountaineer's
transformation into a destination resort and diversified entertainment
complex is on schedule. On June 11th, we broke ground on our new
hotel, which will house 262 well-appointed rooms and suites. On
July 1st, we opened a Las Vegas-style 'buffeteria' that has been
well received by our customers and reduced the waiting time for
patrons in the Gatsby dining room. Next to open will be our new
39,000 square foot gaming room scheduled for later this month,
which will house 595 additional slot machines bringing our total
at Mountaineer to 2,500. Also in August, we plan to open our new
convention center, which will be geared toward local associations
and should increase mid-week traffic. We are gradually implementing
the increase in the maximum wager from $2.00 to $5.00 on our machines
as the machine manufacturers gain Lottery Commission approval of
the new chips, and expect to complete the process by the end of
September. "Export simulcasting of Mountaineer races continues
to have a broader reach and increasingly contribute to the Company's
revenues. During the second quarter, export simulcasting generated
revenues of $784,000, an increase of 38% from $567,000 in the first
quarter of this year. Our average daily live handle, including
export, was $831,600 in the second quarter, an increase of 13%
from $734,500 in the first quarter. We added 10 new export outlets
during the quarter, bringing the total to over 220."Commenting
on the Company's Nevada's properties, Mr. Arneault stated, "As
previously announced, last week we closed the casino and one of
the restaurants at our Reno property and laid off approximately
60 employees. We expect the operating loss in Reno to be approximately
$50,000 per month going forward, which compares to a total of approximately
$800,000 in the first quarter of this year and $586,000 in the
second quarter. We are considering various alternatives for the
property, including selling the hotel to a time-share developer
and retaining ownership or management of the casino, as well as
an outright sale of the property. "Total revenues at our
Speedway Property in North Las Vegas were up 21% to $2.1 million
from the
second quarter of last year, but the property reduced the Company's
earnings by $468,000 or $.02 per share. The Nevada subsidiaries
overall recorded total revenues of $3.4 million, up 18% from
last year's second quarter, but lowered the Company's earnings
by $1.1
million or $.04 per share. We remain focused on exploring opportunities
to reduce our capital investment in Reno and achieve profitability
at the Speedway."
Recent Developments
Mr. Arneault continued, "During the second quarter we
announced that we filed an application to build a state-of-the-art
thoroughbred racetrack in Erie, Pennsylvania. Construction of the
track, which would be located on a parcel of approximately 135
acres, about 150 miles from Mountaineer, is subject to a number
of contingencies and there is no guarantee that the plans will
be executed. We look forward to reporting our progress in this
regard." On August 1st, Mountaineer's automated player tracking
system went on-line, replacing a manual system. The Company expects
the automated player tracking system to generate valuable data
concerning patron preferences as well as provide incentives for
players to avail themselves of all of the resort's amenities. The
system should therefore enable more efficient use of marketing
and promotions dollars. Also in August, the Company amended its
credit facility to increase the available credit line from $60
million to $75 million. The Company plans to use the additional
funds, together with cash flow from operations, to complete Phase
II of the construction at Mountaineer and for the Erie project
if approved by the Pennsylvania Horse Racing Commission. The amendment
also increases the amount available for the repurchase of the Company's
common stock from $3 million to $10 million, provided that the
Company's twelve-month trailing EBITDA first reaches $50 million.
Mr. Arneault concluded, "Due to our recent, imminent, and
planned developments, we are enthusiastic about the Company's
prospects for the remainder of 2001 and beyond."
Conference Call
Edson R. (Ted) Arneault, President and CEO, 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 Tuesday, August 7, 2001. Interested parties
may participate in the call by dialing 212-896-6165 approximately
10 minutes before
the call is scheduled to begin. The conference call will be broadcast live
over the Internet via the Investor Relations section of the
Company's web site at
www.mtrgaming.com. To listen to the live call 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 live, the conference call will be archived
and can be accessed for approximately 90 days. A recorded
phone
replay of the call will
also be available from 12:00 noon ET on Tuesday, August 7, 2001 to 12:00
noon ET on Wednesday, August 8, 2001. Listeners may dial
800-633-8284 (858-812-6440
for international callers) and use the code 19489782 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,
MTR
GAMING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
Three
Months Ended
June 30 |
Six
Months Ended
June 30 |
|
|
|
|
|
|
2001 |
2000 |
2001 |
2000 |
|
|
|
|
|
REVENUES |
|
|
|
|
Gaming |
$47,208,000 |
$36,666,000 |
$90,134,000 |
$68,413,000 |
Pari-mutuel
commissions |
2,087,000 |
1,282,000 |
3,770,000 |
2,382,000 |
Food,
beverage and lodging |
4,077,000 |
3,424,000 |
7,421,000 |
6,190,000 |
Other |
919,000 |
723,000 |
1,524,000 |
1,166,000 |
|
|
|
|
|
Total
revenues |
54,291,000
|
42,095,000 |
102,849,000 |
78,151,000 |
|
|
|
|
|
| COSTS
OF REVENUE |
|
|
|
|
Cost
of gaming |
27,163,000 |
21,064,000 |
52,083,000 |
39,529,000 |
Cost
of pari-mutuel commissions |
1,687,000 |
1,372,000 |
3,210,000 |
2,687,000 |
Cost
of lodging, food and beverage |
4,053,000 |
3,133,000 |
7,690,000 |
5,702,000 |
Cost
of other revenue |
1,224,000 |
615,000 |
1,952,000 |
986,000 |
|
|
|
|
|
Total
costs of revenues |
34,127,000 |
26,184,000 |
64,935,000 |
48,904,000 |
|
|
|
|
|
Gross
Profit |
20,164,000 |
15,911,000 |
37,914,000 |
29,247,000 |
|
|
|
|
|
| SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES: |
|
|
|
|
Marketing
and promotions |
3,478,000 |
2,656,000 |
5,832,000 |
4,101,000 |
General
and administrative |
5,799,000 |
4,585,000 |
11,478,000 |
8,910,000 |
Depreciation
and amortization |
2,273,000 |
1,352,000 |
4,335,000 |
2,892,000 |
|
|
|
|
|
Total
selling, general and
administrative expenses |
11,550,000 |
8,593,000 |
21,645,000 |
15,903,000 |
|
|
|
|
|
Operating
income |
8,614,000 |
7,318,000 |
16,269,000 |
13,344,000 |
|
|
|
|
|
Interest
income |
60,000 |
67,000 |
115,000 |
136,000 |
Interest
expense |
(899,000) |
(634,000) |
(1,962,000) |
(1,454,000) |
|
|
|
|
|
Non-recurring
income |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
Income
from operations before benefit/(provision) for income
taxes |
7,775,000
|
6,751,000 |
14,422,000 |
12,026,000 |
Benefit/(Provision)
for income taxes |
(2,641,000)
|
(2,434,000) |
(4,901,000) |
(4,341,000) |
Income
from continuing operations |
5,134,000
|
4,317,000 |
9,521,000 |
7,685,000 |
|
|
|
|
|
Cumulative
effect of FASB 133, net of tax benefit |
-
|
- |
(92,000) |
- |
|
|
|
|
|
NET
INCOME |
$5,134,000
|
$4,317,000 |
$9,429,000 |
$7,685,000 |
|
|
|
|
|
NET
INCOME PER SHARE - BASIC |
0.22 |
0.20 |
0.41 |
0.36 |
| NET
INCOME PER SHARE -
ASSUMING DILLUTION |
0.20 |
0.17 |
0.37 |
0.32 |
| Weighted
average number of shares outstanding: |
|
|
|
|
Basic |
23,549,810
|
21,794,596 |
22,886,113 |
21,566,833 |
|
|
|
|
|
Diluted |
26,266,467
|
24,733,577 |
25,449,100 |
24,227,201 |
|
|
|
|
|
MTR
GAMING GROUP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
|
|
|
JUNE
30
2001 |
DECEMBER
31,
2000 |
|
|
|
ASSETS |
|
|
Current
Assets: |
|
|
| Cash
and cash equivalents |
$9,378,000 |
$10,564,000 |
Restricted
cash |
724,000 |
505,000 |
Accounts
receivable, net of allowance for doubtful
accounts of $28,000 and $37,000
|
4,228,000 |
3,044,000 |
Accounts
receivable - Lottery Commission |
2,289,000 |
1,073,000 |
Inventories |
1,394,000 |
1,083,000 |
Deferred
financing costs |
555,000 |
555,000 |
Prepaid
taxes |
1,242,000 |
2,410,000 |
Other
current assets |
2,794,000 |
1,678,000 |
|
|
|
Total
current assets |
22,604,000 |
20,912,000 |
|
|
|
Property
and equipment, net |
111,355,000 |
90,501,000 |
Other
assets: |
|
|
Excess
of cost of investments over net assets acquired, net
of accumulated amortization of $2,156,000, and $2,030,000
|
1,618,000 |
1,744,000 |
Deferred
income taxes |
13,000 |
13,000 |
Deferred
financing costs, net of current portion |
1,600,000 |
1,860,000 |
Deposits
and other |
892,000 |
655,000 |
|
|
|
|
$138,082,000 |
$115,685,000 |
|
|
|
| LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
Current
liabilities: |
|
|
| Accounts
payable |
$2,237,000 |
$1,370,000 |
West
Virginia Lottery Commission payable |
160,000 |
646,000 |
Accrued
payroll and payroll taxes |
2,863,000 |
1,227,000 |
Accrued
liabilities |
1,627,000 |
1,755,000 |
Current
portion of capital leases |
3,424,000 |
3,269,000 |
Current
portion of long-term debt |
350,000 |
334,000 |
|
|
|
Total
current liabilities
|
10,661,000 |
8,601,000 |
|
|
|
| Long-term
and other debt, less current portion |
60,713,000 |
56,021,000 |
Capital
lease obligations, net of current portion |
4,286,000 |
3,849,000 |
Deferred
income tax |
3,948,000 |
1,766,000 |
|
|
|
Total
liabilities |
79,608,000 |
70,237,000 |
|
Shareholders' equity:
|
|
|
| Common
stock |
- |
- |
| Paid-in-capital |
43,263,000 |
39,014,000 |
Shareholders'
receivable |
(1,854,000) |
(1,243,000) |
Retained
earnings |
17,065,000 |
7,677,000 |
|
|
|
Total
shareholders' equity |
58,474,000 |
45,448,000 |
|
|
|
|
$138,082,000 |
$115,685,000 |
|
|
|
|
