SEARCH NEWS:

 

Seneca Gaming reports results

Second Quarter Fiscal 2007 Financial Results Summary

Consolidated Results. For the Second Quarter 2007 and for the three months ended March 31, 2006 ("Second Quarter 2006"), consolidated net revenues were $135.9 million and $129.3 million, respectively, an increase of $6.6 million, or 5%. This increase was primarily due to higher net gaming revenues of $6.5 million, or 5%, related to the favorable financial impact of the complete opening of our luxury hotel in Niagara Falls on March 31, 2006. SGC's consolidated earnings before interest, taxes, depreciation, and amortization ("EBITDA") was $41.3 million for the Second Quarter 2007, compared to $46.3 million in the Second Quarter 2006, a decrease of $5.0 million, or 11%.

The decrease in EBITDA reflects the impact of higher revenues offset by increased operating expenses for labor and benefits ($2.2 million), state slot exclusivity fees ($5.9 million), and pre-opening expenses ($4.0 million). The increase in labor costs over the prior year is primarily due to additional employees to staff the luxury hotel and related amenities at Seneca Niagara Casino and Hotel. The increase in the state slot exclusivity fees is primarily due to an increase in the state's rate from 18% to 22% effective January 1, 2007 ($4.6 million). The majority of the increase in pre-opening expenses relate to the development and construction of the Seneca Buffalo Creek Casino ($3.8 million in head lease payments).

Our Second Quarter 2007 results were also affected by inclement weather conditions during the quarter and the ongoing construction at Seneca Allegany Casino and Hotel in preparation of the opening of the 212 room hotel and related amenities on March 30, 2007. SGC's consolidated Adjusted EBITDA (EBITDA plus pre-opening expenses) was $47.2 million for the Second Quarter 2007 compared to $48.2 million for the Second Quarter 2006, or a decrease of $0.9 million, or 2%. Consolidated net income for the Second Quarter 2007 was $22.9 million compared to $32.1 million for the Second Quarter 2006, a decrease of $9.2 million, or 29%.

Seneca Niagara Casino and Hotel Revenues and EBITDA. For the Second Quarter 2007, Seneca Niagara Casino and Hotel's net gaming revenues were $92.4 million compared to $85.4 million in the Second Quarter 2006, an increase of $7.0 million, or 8%. Total net revenues for the Second Quarter 2007 increased to $99.0 million from $91.8 million over the comparable prior year period, an increase of $7.2 million, or 8%. Seneca Niagara Casino and Hotel generated EBITDA for the Second Quarter 2007 and Second Quarter 2006 of $38.6 million and $33.4 million, respectively, or an increase of $5.2 million, or 16%. Adjusted EBITDA for the Second Quarter 2007 was $38.6 million compared to $35.2 million for the Second Quarter 2006, an increase of $3.4 million, or 10%.

The overall net revenue increase at the Seneca Niagara Casino and Hotel is primarily attributable to an increase in net slot revenue, from $71.5 million in the Second Quarter 2006 to $79.5 million in the Second Quarter 2007, an increase of $8.0 million, or 11%. Net table games revenue decreased $1.0 million, or 7% during the comparative periods, due to a decrease in overall table games hold percentage, from 17.7% for the Second Quarter 2006 to 15.4% for the Second Quarter 2007.

Seneca Allegany Casino and Hotel Revenues and EBITDA. During the Second Quarter 2007 and 2006, Seneca Allegany Casino and Hotel had net gaming revenues of $35.4 million and $35.9 million, respectively, a decrease of $0.5 million, or 1%. Total net revenues at Seneca Allegany Casino were $36.9 million for the Second Quarter 2007 and $37.4 million for the Second Quarter 2006, a decrease of $0.5 million, or 1%. Seneca Allegany Casino and Hotel generated EBITDA for the Second Quarter 2007 and Second Quarter 2006 of $7.0 million and $13.3 million, respectively, or a decrease of $6.3 million, or 47%. Adjusted EBITDA for the Second Quarter 2007 was $9.2 million compared to $13.3 million for the Second Quarter 2006, a decrease of $4.1 million, or 31%.

The decrease in net revenue at Seneca Allegany Casino and Hotel was attributable to a $0.2 million decrease in net slot revenue and a $0.3 million decrease in net table games revenue, reflecting the affect of inclement weather during the Second Quarter 2007 as compared to the prior year period, as well as the construction disruption in preparation for the opening of the new resort hotel, restaurants and other amenities on March 30, 2007.

Brian Hansberry, Interim President and Chief Executive Officer of SGC, stated the following: "I am very pleased with the operating results at our Seneca Niagara Casino & Hotel. The operating performance continues to exceed our expectations. For the Second Quarter 2007, Seneca Niagara Casino and Hotel generated incremental EBITDA and Adjusted EBITDA of $5.2 million and $3.4 million, respectively, as compared to the comparable 2006 three-month period, despite the increase in the state slot exclusivity fees from 18% to 22% on January 1, 2007, the impact of this 4% increase was $3.3 million for the three months ending March 31, 2007 compared to the same period in 2006. Net revenue at our Seneca Allegany Casino for the Second Quarter 2007 was relatively flat with the comparable 2006 period and was affected by inclement weather conditions and by on-going construction disruption during the Second Quarter 2007, as we worked to open our 212 room hotel and restaurants, which we successfully opened on March 30, 2007.

This significant investment by the Seneca Nation of Indians supports the new permanent gaming floor that was opened on December 28, 2006. The new Seneca Allegany Casino and Hotel complements our Niagara Casino and Hotel and continues to reflect the Nation's commitment to providing a first class gaming experience to our patrons and investment in the economy of Western New York. This latest investment in our gaming operations allows us to further our focus on expanding the demographic and geographic profile of our gaming patrons, effectively address regional competition, and improve the operating performance at Seneca Allegany Casino and Hotel."

Six Months Fiscal 2007 Financial Results Summary

Consolidated Results. For the six months ended March 31, 2007 and 2006, consolidated net revenues were $276.1 million compared to $238.2 million, an increase of $37.9 million, or 16%. Net gaming revenues during the comparative periods also increased $34.9 million, from $224.8 million to $259.7 million, a 16% increase. Consolidated EBITDA was $91.1 million for the six months ended March 31, 2007 compared to $80.9 million for the six months ended March 31, 2006, an increase of $10.2 million, or 13%. Consolidated net income was $54.4 million for the six months ended March 31, 2007, a $1.0 million, or 2%, increase from the comparative period in 2006. The increase in net income was primarily due to the increased EBITDA above, offset by increased pre-opening expenses ($5.7 million).

Seneca Niagara Casino and Hotel Revenues and EBITDA. Seneca Niagara Casino and Hotel's total net revenues were $202.2 million and $165.3 million for the six months ended March 31, 2007 and 2006, respectively, an increase of $36.9 million or 22%. Net gaming revenues were $188.9 million and $155.0 million for the six months ended March 31, 2007 and 2006, respectively, an increase of $33.9 million or 22%. The increase in net revenue was mainly due to a $30.1 million increase in net slot revenue. Seneca Niagara Casino and Hotel generated EBITDA for the six months ended March 31, 2007 and 2006 of $81.1 million and $56.9 million, respectively, or an increase of 42%. The EBITDA amount for the six months ended March 31, 2006 includes approximately $4.9 million of pre-opening costs related to the opening of the luxury hotel and gaming expansion. Adjusted EBITDA for the six months ended March 31, 2007 was $81.1 million compared to $61.8 million for the six months ended March 31, 2006, an increase of $19.3 million, or 31%.

Seneca Allegany Casino and Hotel Revenues and EBITDA. For the six months ended March 31, 2007 and 2006, Seneca Allegany Casino and Hotel had net revenues of $73.8 million and $72.9 million, respectively, an increase of $0.9 million, or 1%. Net gaming revenues for the same comparative periods were $70.8 million and $69.9 million, respectively, an increase of $0.9 million or 1%. EBITDA for the six months ended March 31, 2007 and 2006 were $18.2 million and $24.7 million, respectively, a decrease of $6.5 million or 26%. Adjusted EBITDA for the six months ended March 31, 2007 was $21.2 million compared to $24.7 million for the six months ended March 31, 2006, a decrease of $3.5 million, or 14%.

Expansion Projects

During the Second Quarter 2007, SGC spent $45.9 million for construction costs and the purchase of property and equipment, including $27.5 million for the construction and equipping of the resort hotel at Seneca Allegany Casino, $1.1 million for the closeout of construction costs related to Seneca Niagara Casino and Hotel, and $1.2 million for the construction and equipping of the temporary casino at Seneca Buffalo Creek. The remaining balance of capital expenditures relates to other construction and equipment purchases for Seneca Allegany Casino and Hotel and Seneca Niagara Casino and Hotel.

The Seneca Allegany Casino resort hotel project is complete, and we opened the hotel, with its restaurants and other amenities, on March 30, 2007. The estimated total cost to construct and equip the resort hotel is approximately $167.0 million.

Barry E. Snyder, Sr., Chairman of the SGC Board of Directors commented: "We are very excited and extremely proud of the completion of another successful project with the opening of our new 212-room resort hotel and related amenities on the Nation's Allegany Territory on March 30, 2007. Seneca Allegany Casino and Hotel is the only full service Class III gaming and entertainment complex in its region and demonstrates the Seneca Nation of Indians' commitment to providing a premier gaming and entertainment experience to our patrons while continuing our investment in the people and economy of Western New York. Regarding our plans for our Buffalo Creek Casino, we are close to completing the construction and equipping of a temporary Class III gaming facility on our Buffalo Creek Territory. In spite of the existing legal challenges before us, we remain confident, but have no assurance, that these challenges will be resolved in our favor. We plan to open the approximate 6,000 square foot temporary facility containing approximately 125 slot machines and a snack bar in the summer of 2007."

< Gaming News