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Twin River suffers Q1 revenue decline, announces reopening plans13 May 2020(PRESS RELEASE) -- Twin River Worldwide Holdings, Inc. today reported financial results for the first quarter ended 31 March 2020. First Quarter 2020 and Recent Highlights
"Our Company started the year strong, reporting year-over-year revenue growth of over 23% in the first two months of the quarter," Mr. Papanier continued. "While our full quarter results were meaningfully impacted by the closure of our properties in March, we have taken broad-based actions to reduce expenses and enhance liquidity. Our leadership team has also remained hard at work executing on key strategic growth initiatives, including our recently announced deal to acquire three casinos from Eldorado and Caesars to further expand our geographic diversity and enhance our financial profile. Despite near-term uncertainties, we are confident that our strong balance sheet, liquidity and long-term strategic planning will enable us to emerge from this crisis in an even better position." Managing through COVID-19 In response to the COVID-19 pandemic, Twin River quickly implemented a multi-faceted plan with a focus on employee health and safety, long-term strategic positioning and liquidity:
Prior to the shut-down, results were robust with revenue in the first two months of the year up $17.1 million, or 23.4%, to $90.3 million compared to $73.2 million in the prior year period. While net income during these two months was down $4.2 million, or 43.9%, adjusted EBITDA was up $2.0 million, or 8.2%, year-over-year. At the segment level, the Company saw strong results in the first two months as all properties were up year-over year in both revenue and adjusted EBITDA with the exception of the Company's Twin River Casino Hotel ("Lincoln"). The increases noted include the addition of Dover Downs and the Black Hawk Casinos in the current year period and were partially offset by the impact of new competition at Lincoln, which continued to show signs of moderation and recovery in the first two months of 2020. February 2020 represented the strongest operating contribution at Lincoln since the recent competition opened and the Company believes it was on track to exceed its recovery expectations. Other Financial Information Interest expense for the first quarter of 2020 increased $4.3 million to $11.4 million as, on 10 May 2019, Twin River entered into a new credit facility and issued $400 million aggregate principal amount of senior notes. Interest expense also reflected the increased borrowings resulting from our decision on 16 March 2020 to draw down the full balance of our revolving credit facility. As a result of the current and expected future economic and market conditions surrounding the COVID-19 pandemic, the Company performed a goodwill and intangible impairment analysis during the first quarter of 2020 which resulted in a total impairment charge of $8.7 million related entirely to its Black Hawk Casinos reporting unit. Twin River recorded a tax benefit of $5.7 million in the first quarter of 2020 as compared to tax expense of $5.7 million in the prior year period. The change year-over-year was driven by a reduction in pre-tax book income and the impact of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") on the federal rate applied during 2020. In addition, the net effect for discrete items in the quarter, including the impact of the CARES Act on timing items, the impairment of goodwill and intangible assets, the vesting of restricted stock and a gain on insurance recoveries, increased the overall tax benefit in the quarter. Outstanding indebtedness at the end of the first quarter of 2020, before the impact of $12.5 million of unamortized deferred financing fees and $1.9 million of unamortized original issue discount, totaled $947.8 million, inclusive of the $250 million borrowed under the revolving credit facility. During the first quarter of 2020, Twin River paid a cash dividend of $0.10 per share of common stock on 20 March 2020, declared on 24 February 2020, for an aggregate $3.2 million and repurchased 1.6 million shares of the Company's common stock for approximately $29.7 million under the previously announced capital return program. As of 31 March 2020, the Company had approximately $86.9 million available for use under its capital return program. As a result of the previously announced amendment to the credit facility to provide financial covenant relief, the Company has suspended future dividend payments and share repurchases. 2020 Guidance The Company expects that the COVID-19 pandemic will continue to negatively impact its results until its properties are allowed to re-open in full to the public and its guests return to pre-pandemic activities, which is indeterminable at this time as it is dependent on the severity of the pandemic, the duration of the mandatory shut down period, customer responses when its properties re-open and the challenges and uncertainty concerning the global economy. Given the uncertain impact of COVID-19 pandemic, the Company believes it is prudent to withdraw its 2020 full year guidance provided on 3 March 2020. The Company has a plan to reduce its operating cash burn rate to approximately $3 million per month in preparation for a long-term shut down. As some states and local governments have initiated plans to re-open non-essential businesses, it is possible the Company may not need to institute such cash savings plans at the end of May. The addition of our previously announced acquisitions would add incremental cost to our operating cash burn rate. In either case, the Company believes it has sufficient liquidity in the unlikely event that our properties remain closed in excess of 18 months. The Company notes that as it begins to re-open properties, it will incur incremental start-up costs that will temporarily increase its operating cash burn rate. Reconciliation of GAAP Measures to Non-GAAP Measures To supplement the financial information presented on a generally accepted accounting principles basis, the Company has included in this earnings release non-GAAP financial measures for Adjusted EBITDA, Adjusted EBITDA margin, gross gaming revenue and adjusted earnings per diluted share, which exclude certain items described below. The Company believes these measures represent important measures of financial performance that provide useful information that is helpful in understanding the Company's ongoing operating results. The reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below. "Adjusted EBITDA" is earnings for the Company, or where noted the Company's reporting segments, before, in each case, interest expense, net of interest income, provision for income taxes, depreciation and amortization, acquisition, integration and restructuring expense, goodwill and asset impairment, share-based compensation, professional and advisory fees associated with capital return program, credit agreement amendment expenses, gain on insurance recoveries, and certain other gains or losses as well as, when presented for the Company's reporting segments, an adjustment related to the allocation of corporate cost among segments. Adjusted EBITDA margin is measured as Adjusted EBITDA as a percentage of revenue. "Gross gaming revenue" represents total gaming revenue adjusted for the State of Rhode Island's and the State of Delaware's shares of net terminal income, table games revenue and other gaming revenue, and is being presented by the Company to reflect the unique structure of the Company's operations in those states where the state's share of the Company's revenues is retained at the gross revenue level rather than through taxes. Management believes that the presentation of gaming revenue on a gross basis allows for comparisons to gross gaming win data provided throughout the gaming industry. "Adjusted EPS" represents net income applicable to common stockholders per diluted share before acquisition, integration and restructuring expense, credit agreement amendment expenses, gain on insurance recoveries, goodwill and asset impairment charge, and certain other gains or losses. Management has historically used Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS when evaluating operating performance because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of the Company's core operating results and as a means to evaluate period-to-period performance. Management also believes that Adjusted EBITDA is a measure that is widely used for evaluating operating performance of companies in our industry and a principal basis for valuing resort and gaming companies like the Company. Management of the Company believes that while certain items excluded from Adjusted EBITDA and Adjusted EPS may be recurring in nature and should not be disregarded in evaluating the Company's earnings performance, it is useful to exclude such items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events that may not be comparable between the periods presented or they may not relate specifically to current operating trends or be indicative of future results. Neither Adjusted EBITDA nor Adjusted EPS should be construed as an alternative to GAAP net income or GAAP diluted EPS, respectively, as an indicator of the Company's performance. In addition, Adjusted EBITDA or Adjusted EPS as used by the Company may not be defined in the same manner as other companies in the Company's industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies.
Twin River suffers Q1 revenue decline, announces reopening plans
is republished from Online.CasinoCity.com.
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