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MTR Gaming Group reports second quarter 2012 results10 August 2012CHESTER, W.Virginia -- (PRESS RELEASE) -- MTR Gaming Group, Inc. (NasdaqGS: MNTG) today announced financial results for the second quarter and six months ended June 30, 2012. “The second quarter was a historic one for MTR Gaming as we opened our new VLT facility at Scioto Downs on June 1st, and we are encouraged by the initial performance of this first-class property” Second Quarter 2012 Highlights The June 1st opening of the video lottery terminal (“VLT”) gaming facility at Scioto Downs with 1,787 VLTs, which added approximately 700 new jobs in the Columbus area. Net revenue growth of 7.8%, including revenue of $12.6 million at Scioto Downs. Adjusted EBITDA from continuing operations for the second quarter of 2012 was $23.0 million, an increase of 8.1% from the prior-year period, excluding $2.2 million of project-opening costs in the second quarter of 2012 and $1.8 million received from a mineral rights lease bonus payment in the second quarter of 2011. “The second quarter was a historic one for MTR Gaming as we opened our new VLT facility at Scioto Downs on June 1st, and we are encouraged by the initial performance of this first-class property,” said Jeffrey J. Dahl, President and Chief Executive Officer of MTR Gaming Group, Inc. “Overall, we were pleased with our second quarter revenues and adjusted EBITDA results. Additionally, we recently completed the second phase of our expansion at Scioto Downs, which provides for an additional 329 VLTs (which increased the total VLTs to 2,116), a buffet with approximately 300 seats and a sports bar for patrons to enjoy.” For the second quarter of 2012, the Company’s total net revenues were $119.1 million, an increase of 7.8% compared to $110.5 million in the same period of 2011. Excluding $2.2 million in project-opening costs in the second quarter of 2012 and $1.8 million received from a mineral rights lease bonus payment in the second quarter of 2011, adjusted EBITDA from continuing operations in the second quarter of 2012 was $23.0 million, an increase of 8.1% from the prior-year period, and the adjusted EBITDA from continuing operations margin was 19.3% for both the current and prior-year periods. The Company reported a loss from continuing operations of $2.1 million for the quarter, or $0.08 per diluted share, compared to income from continuing operations of $2.3 million, or $0.08 per diluted share, in the same period of 2011. Excluding $2.2 million of project-opening costs related to the opening of the VLT facility at Scioto Downs, second quarter 2012 income from continuing operations would have been $0.1 million. Income from continuing operations was also affected by a $3.0 million increase in interest expense during the second quarter of 2012 (associated with the Company’s debt refinancing in the third quarter of 2011). Net revenues at Mountaineer Casino, Racetrack & Resort increased 2.0% to $58.7 million in the second quarter of 2012 compared to $57.5 million (which includes $1.8 million received from a mineral rights lease bonus payment) in the second quarter of 2011. Revenues from slots increased by $4.2 million compared to the same quarter of 2011; however, revenues from table gaming at Mountaineer decreased by $1.3 million compared to the prior-year period. The decrease in table gaming revenues was primarily attributable to increased competition from the new casino in Cleveland, Ohio. The property saw adjusted EBITDA decrease to $12.3 million from $13.6 million in the comparable quarter of 2011, while the adjusted EBITDA margin at Mountaineer decreased to 21.0% compared to 23.6% in the prior-year quarter. Excluding the mineral rights lease bonus payment in the second quarter of 2011, adjusted EBITDA in the second quarter of 2012 increased 5.0% from the prior-year period and the adjusted EBITDA margin was down 10 basis points from the comparable period. Net revenues at Presque Isle Downs & Casino decreased 8.2% to $47.8 million during the second quarter of 2012 compared to $52.1 million during the second quarter of 2011. Revenues from slots decreased by $3.8 million compared to the same quarter of 2011, and revenues from table gaming at Presque Isle Downs decreased by $0.3 million compared to the prior-year period. The property generated adjusted EBITDA of $9.9 million compared to $12.2 million in the same quarter of 2011, with the adjusted EBITDA margin decreasing to 20.7% compared to 23.3% in the prior-year period. The decrease in net revenues and Adjusted EBITDA for the second quarter of 2012 was primarily attributable to increased competition from a new casino in Ohio. Net revenues at Scioto Downs were $12.6 million during the second quarter of 2012 compared to $0.9 million during the second quarter of 2011. The property generated adjusted EBITDA of $1.7 million compared to a loss of $0.4 million in the same quarter of 2011. The adjusted EBITDA margin for the second quarter of 2012 was 13.5%. The increase in net revenues and adjusted EBITDA for the second quarter of 2012 was attributable to the opening of the VLT facility on June 1, 2012. Corporate overhead costs totaled $3.2 million during the second quarter of 2012 compared to $2.2 million in the prior-year period, with the increase due primarily to additional compensation-related expenses. For the first half of 2012, MTR’s total net revenues increased 8.7% to $227.1 million from $208.9 million in the first half of 2011. Adjusted EBITDA from continuing operations increased 4.8% to $41.2 million (including $2.5 million of project-opening costs) from $39.4 million (including $1.8 million received from a mineral rights lease bonus payment) in the same period last year. The 2012 year-to-date loss from continuing operations was $5.3 million, or $0.19 per diluted share, and included $2.5 million of project-opening costs, $3.0 million of incremental interest expense associated with the Company’s debt refinancing in the third quarter of 2011, and approximately $1.3 million attributable to additional valuation allowances on deferred tax assets. In the same period last year, the Company reported a loss from continuing operations of $2.9 million, or $0.10 per diluted share, which included income tax expense of approximately $1.4 million attributable to additional valuation allowances on deferred tax assets. See attached tables, including a reconciliation of net income (loss), a GAAP financial measure, to adjusted EBITDA, as well as the calculation of adjusted EBITDA margin, non-GAAP financial measures. Balance Sheet and Liquidity As of June 30, 2012, MTR had $93.6 million in cash and cash equivalents, $32.5 million of funds that are held for further construction of the VLT facility at Scioto Downs, and $552.8 million in total debt, net of discount. In addition, the Company has $20 million available for borrowing under its revolving credit facility. |