FOR IMMEDIATE RELEASE
MTR GAMING GROUP NAMES DAVID HUGHES COO
THE COMPANY UPDATES FOURTH QUARTER GUIDANCE
CHESTER, WV - December 6, 2002 - MTR Gaming Group, Inc. (Nasdaq
National Market:MNTG) today announced that it appointed David
R. Hughes as Chief Operating Officer of its Mountaineer Park,
Inc. subsidiary, and updated financial guidance for the fourth
quarter ending December 31, 2002.
David R. Hughes, COO of MTR Gaming Group's Mountaineer Park,
Inc.
Mr. Hughes brings to MTR an impressive, 18-year operational
and financial background with significant executive experience
in the gaming and hospitality industries. From August 2001
to December 2002, he served as CFO of Penn National Gaming's
[Nasdaq:PENN] Charles Town Races & Slots property in Charles
Town, WV, where he was instrumental in increasing profitability
by controlling costs and implementing various operational and
strategic changes. Mr. Hughes also managed the property's $74
million expansion project. Prior to that, from September 2000
- July 2001, he was CEO of JAB Sun Cruz Casinos' U.S. Operations,
where he was responsible for all operational aspects of the
10-property company and helped increase gaming revenues and
reduce administrative costs. Beginning in 1995, Mr. Hughes
held senior management positions with Sun International Gaming
Enterprises (at its Resorts Atlantic City and Mohegan Sun Casino
properties). Additionally, from 1984 - 1994, he served in various
financial and operational capacities at Trump Plaza Hotel & Casino
and Sands Hotel & Casino. He holds a Bachelor of Science
Degree in Business Administration and Accounting from Stockton
State College and is a Certified Public Accountant. Mr. Hughes
is expected to start at Mountaineer on January 1, 2003.
Revised Guidance for the Fourth Quarter Ending December 31,
2002
For the fourth quarter to date and particularly in November,
gaming revenues from slot operations at the Company's Mountaineer Casino Racetrack and Resort have been lower than management
earlier expected. While year-over-year gains in slot revenue
had averaged 24.7% for the first nine months of 2002, they
are now growing at a slower rate than expected, approximately
14% for the fourth quarter to date. Based on these recent results,
and if this trend continues, the Company anticipates total
revenues for the quarter to be at the low end of its previously
announced guidance range of $61 - 65 million. However, because
of the greater impact of gaming revenue on operating margins,
diminished operating expense leverage due to lower revenue,
and higher than anticipated costs in October and November,
MTR does not expect to meet its previously announced EBITDA
and net income guidance. MTR now anticipates EBITDA of $10.0
million - $10.8 million, and net income of $3.0 million - $3.6
million, or $.10 - $.12 per diluted share (based on 29 million
diluted shares) for the fourth quarter ending December 31,
2002.
Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group,
commented, "We are certainly disappointed with our recent
gaming revenue levels. While similar published results for
the greyhound track in Wheeling (approximately 50 miles away)
suggest that local economic conditions may have played a role,
we are analyzing how to more effectively and efficiently penetrate
our core markets and improve our financial performance."
Mr. Arneault continued, "We are pleased to welcome David
to MTR as Mountaineer's COO. We believe he will be an important
contributor as we focus on lowering expenses and aggressively
marketing Mountaineer to drive revenues, as well as in our
development of Presque Isle Downs in Erie. His significant
operating and financial experience in the gaming sector, as
well as his proven ability to improve financial results, will
be an extremely valuable asset to MTR."
The Company also noted that because it is still negotiating
with several parties for the sale of the Reno property, it
has kept the property open with a small staff, and does not
believe that this will have a material impact on the Company's
financial results. 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.
About Scioto Downs
Scioto Downs owns and operates a harness horse racing facility in Columbus,
OH. Major racing programs conducted at Scioto’s facilities include
the Little Brown Jug Preview, the Scarlet O’Hara, the Pink Bonnet,
the Ohio Sires Stakes events and Ohio Fair stakes events.
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. |
