MTR GAMING CONFIRMS FOCUS ON RACETRACK
OPPORTUNITIES; ENTERS INTO LETTER OF INTENT TO ACQUIRE 50%
INTEREST IN ENTITY
PURSUING MINNESOTA RACING LICENSE
CHESTER, WV – February
20, 2004 – MTR
Gaming Group, Inc. (Nasdaq National Market:MNTG), in a joint
press release with Harrah’s Entertainment yesterday concerning
MTR’s planned acquisition of the Binion’s Horseshoe
Hotel & Casino in Las Vegas, confirmed that its primary
external growth strategy remains the pursuit of racetrack
opportunities.
In this regard, MTR entered a letter of intent that sets forth
an agreement in principle to acquire a 50% interest in North
Metro Harness Initiative, LLC, which has filed an application
with the Minnesota Racing Commission to construct and operate
a harness racetrack and card room in Columbus Township, Anoka
County, Minnesota, approximately 30 miles north of downtown
Minneapolis and 40 miles from the Mall of America on a 165-acre
site currently under option. The proposed track would be the
second of only two racetracks permitted by law in the seven-county
Minneapolis metropolitan area. On Wednesday, Rose Mary Williams,
MTR’s Director of Racing, appeared before the Minnesota
Racing Commission in support of the license application.
The Company’s due diligence investigation is underway,
along with the negotiation of definitive agreements. The letter
of intent grants MTR the exclusive right to deal with the seller
and calls for the Company to invest $7.5 million in the event
North Metro Harness obtains the necessary regulatory licenses.
The transaction will also be subject to receipt of all required
governmental approvals.
Commenting on this opportunity, as well as the Company’s
plans to acquire the Binion’s Horseshoe Hotel & Casino
announced yesterday, Edson R. (Ted) Arneault, President and
Chief Executive Officer of MTR Gaming, said, “This prospective
transaction fits well with our chief strategy to expand and
diversify by building or acquiring other middle-market gaming
and/or parimutuel businesses, and would enable us to leverage
our expertise in this area. We are actively pursuing additional
racing prospects, and are optimistic about this key growth
strategy, as well as the proposed transaction with Harrah’s.
We expect the Binion’s transaction to be immediately
accretive to EBITDA during the term of the joint operating
agreement with Harrah’s. We look forward to reporting
our progress on these fronts and plan to conduct a conference
call after the closing of the Binions acquisition.”
About MTR Gaming Group
MTR Gaming Group, Inc., through subsidiaries, owns and operates
the Mountaineer Casino Racetrack and Resort in Chester,
West Virginia, Scioto Downs in Columbus, Ohio, the Ramada Inn
and Speedway Casino in North Las Vegas, Nevada, and holds a
license (judicial review pending) to build Presque Isle Downs,
a thoroughbred racetrack with pari-mutuel racing in Erie, Pennsylvania.
The Mountaineer facility 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. MTR is included on the Russell 2000® and
Russell® 3000 Indexes. For more information, please visit
www.mtrgaming.com.
Reconciliation of Non-GAAP Measures to GAAP
EBITDA
or earnings before interest, taxes, depreciation and amortization
is not a measure of performance or liquidity calculated
in accordance with generally accepted accounting principles
(“GAAP”), is unaudited and should not be considered
an alternative to, or more meaningful than, net income or income
from operations, as an indicator of our operating performance,
or cash flows from operating activities, as a measure of liquidity.
We have included EBITDA in our discussion because it is a widely
used measure of performance and basis for valuation of companies
in our industry. Uses of our cash flows that are not reflected
in EBITDA include capital expenditures (which may be significant),
interest payments, income taxes, and debt principal repayments.
Moreover, other companies that provide EBITDA information may
calculate and define EBITDA differently than we do.
Except for historical information, this press release contains
forward-looking statements concerning, among other things,
the Company’s negotiation of a definitive agreement with
North Metro Harness Initiative, LLC and the closing of the
Binion’s acquisition. Such statements are based on the
Company’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. We can give no assurance that
definitive agreements will be executed as expected or that
the transactions will ultimately be effected. The Company does
not intend to update publicly any forward-looking statements,
except as may be required by law. |
