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MTR GAMING GROUP ANNOUNCES FIRST QUARTER RESULTS
CHESTER, WV – May 12, 2008 – MTR Gaming Group, Inc. (NasdaqGS:MNTG) today announced financial results for the first quarter ended March 31, 2008. See attached tables (including Reconciliation of Non-GAAP Measures to GAAP).
For the first quarter, net revenues increased to $116.3 million, up 26% from $92.0 million in the same period of 2007. EBITDA from continuing operations was $16.2 million, up 24% compared to $13.1 million in the first quarter of 2007. In both cases, the increases were due largely to the inclusion of Presque Isle for the entire first quarter in 2008, compared to only 32 days in the first quarter of 2007, and of table games and poker at Mountaineer. The Company reported a net loss of $2.6 million or $0.10 per diluted share, of which $1.4 million or $0.05 per diluted share was from discontinued operations. The net loss includes the following items on a pre-tax basis: a $2.8 million gain from the sale of the Speedway Casino real property, a $3.4 million loss on debt modification associated with the amendment of our revolving credit facility and $0.4 million in strategic development expenses. In the same period last year, the Company reported net income of $559,000 or $0.02 per diluted share.
Net revenues at the Mountaineer Casino, Racetrack & Resort increased 11% to $74.0 million, compared to $66.5 million in the first quarter of 2007, primarily due to the introduction of poker and table gaming in the fourth quarter of 2007. Poker and table games generated $2.2 million and $10.1 million of revenues, respectively, during the first quarter of 2008. Mountaineer’s revenue from slots decreased by $5.7 million, or 9.5% year-over-year primarily due to the continuing impact on the market from competing gaming operations in Pennsylvania. The property generated EBITDA of $14.1 million, versus $13.7 million in the comparable quarter of 2007.
For the first quarter of 2008, Presque Isle Downs contributed net revenues of $38.8 million and EBITDA of $6.4 million. Presque Isle Downs opened on February 28, 2007, and for the 32 days included in the first quarter of 2007, generated gaming revenues of $21.1 million and EBITDA of $2.4 million, after $2.9 million in project opening expenses.
On March 7, 2008, MTR completed the sale of Binion’s Gambling Hall & Hotel in Las Vegas, Nevada to TLC Casino Enterprises, Inc. resulting in cash to the Company of approximately $28.5 million, of which $27.6 million was utilized to reduce amounts outstanding under MTR’s credit facility. Reclassifications have been made to the prior period presentation to reflect the assets and liabilities of Binion’s as held for sale and the operating results and cash flows as discontinued operations.
Also in the first quarter of 2008, MTR sold the Speedway Casino’s real property to Ganaste, LLC for $11.4 million in cash, resulting in a gain on the sale of approximately $2.8 million. The second phase of the transaction, which is subject to approval by the Nevada Gaming Commission and the City of North Las Vegas, calls for the sale of the gaming assets to Lucky Lucy D, LLC, for a total of $6.775 million, comprised of $2 million in cash to be paid at closing and the balance of up to $4.775 million in an earn-out based on the property’s gross revenues over the next four years. Pending regulatory approval and closing of the Lucky Lucy transaction, MTR will continue to operate the property under a short-term lease. The transaction is expected to close next month.
Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, “We were extremely pleased with the revenue contribution from table games at Mountaineer in the first quarter. We believe table games at Mountaineer will continue to enhance the property’s competitive position by drawing new customers and driving increased play from our existing customers, which we believe will contribute to Mountaineer’s gaming revenue growth and further establishment as a destination resort. We also saw ancillary revenues from food, beverage and lodging increase by approximately $1.3 million, up 28.4%, in the first quarter, due primarily to the opening of table games at Mountaineer.”
“Presque Isle is performing very well, as evidenced by revenues of nearly $39 million for the first quarter. As we move into our seasonally stronger quarters, coupled with the commencement of our cross marketing initiatives, we expect revenue to continue to meet or exceed our expectations.”
Mr. Arneault continued, “We are also excited to report that Running Aces Harness Park, of which we own 50%, opened on April 11, 2008. The track conducts races Friday through Monday, and will add an additional night of racing beginning in mid-June. We are on schedule to open a 50-table card room, with casino card games and poker, in July ’08.”
Outlook
Mr. Arneault concluded, “We remain focused on growing and optimizing MTR’s core assets in 2008, and at the same time, are working toward reducing debt and associated interest expense. We are on-track to achieve our previously stated 2008 revenue and EBITDA guidance.”
As a result of the expected closing of the Speedway Casino sale next month, which will result in the reclassification of the Speedway results to discontinued operations, and the impact of the loss on debt modification associated with the amendment of the Company’s revolving credit facility, our 2008 guidance has been amended to account for these events as follows:
- Total revenues of at least $504 million (unchanged);
- EBITDA of at least $72 million (unchanged); and
- Net loss of no more than $2.0 million.
Reconciliation of Non-GAAP Measures to GAAP
EBITDA represents earnings (losses) before interest, income tax expense (benefit), depreciation and amortization, equity in loss of unconsolidated joint venture and gain (loss) on disposal of property. EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”), is unaudited and should not be considered as 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. EBITDA has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry. Uses of cash flows that are not reflected in EBITDA include capital expenditures (which are significant given our expansion), interest payments, income taxes, and debt principal repayments. Moreover, other companies that provide EBITDA information may calculate EBITDA differently than we do. A reconciliation of GAAP net income (loss) to EBITDA is included in the financial tables accompanying this release.
Conference Call
Management will conduct a conference call focusing on the financial results and corporate developments at 10:00 a.m. EDT on Monday, May 12, 2008. Interested parties may participate in the call by dialing (706) 679-0882. Please call in 10 minutes before the call is scheduled to begin and ask for the MTR Gaming call (conference ID #45912122).
The conference call will be webcast live via the Investor Relations section of the Company’s website at www.mtrgaming.com. To listen to the live webcast 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, conference call will be archived on the Investor Relations section of the Company’s web site.
About MTR Gaming Group
MTR Gaming Group, Inc., through subsidiaries, owns and operates the Mountaineer Casino Racetrack and Resort in Chester, WV; Presque Isle Downs & Casino in Erie, PA; Scioto Downs in Columbus, OH; the Ramada Inn and Speedway Casino in North Las Vegas, NV; and Binion's Gambling Hall & Hotel in Las Vegas, NV. The Company also owns a 90% interest in Jackson Trotting Association, LLC, which operates Jackson Harness Raceway in Jackson, MI, and a 50% interest in the North Metro Harness Initiative, LLC, which has a license to operate a harness racetrack 30 miles north of downtown Minneapolis. MTR is included on the Russell 2000© and Russell© 3000 Indexes. For more information, please visit www.mtrgaming.com.
For Additional Information, Please Contact:
MTR Gaming Group, Inc.
www.mtrgaming.com
Steven D. Overly, VP, Business and Legal Affairs
(304) 387-8558
soverly@mtrgaming.com
Investor Relations Counsel:
The Equity Group Inc.
www.theequitygroup.com
Melissa Dixon (212) 836-9613
Mdixon@equityny.com
Linda Latman (212) 836-9609
LLatman@equityny.com |
