Press Release: MTR Gaming Group, Inc.
August 8, 2001
CHESTER, WV -- MTR Gaming Group, Inc. (Nasdaq National Market:MNTG) yesterday announced record financial results
for the second quarter ended June 30, 2001. See attached tables.
Second Quarter Financial Highlights - versus fiscal 2000 second quarter
Total revenues increased 29% to $54.3 million.
EBITDA was up 26% to $10.9 million.
Operating income grew 18% to $8.6 million
Net income rose 19% to $5.1 million or $.20 per diluted share.
Six-Month Financial Highlights - versus the first six months of fiscal 2000
Total revenues were up 32% to $102.8 million
EBITDA rose 27% to $20.6 million
Operating income increased 22% to $16.3 million
Net income grew 23% to $9.4 million or $.37 per diluted share
Edson R. (Ted) Arneault, President and CEO of MTR Gaming Group, stated, ``We are very pleased with the results
we are seeing from our expanded operations and aggressive marketing campaign for Mountaineer. Net win from slot
operations at Mountaineer increased 29% to $44.6 million in the second quarter from the second quarter of 2000,
while net win-per-day-per-machine was $261 with 1,905 machines, compared to $282 with 1,355 machines in the same
period of last year. Net win-per-day-per-machine was up from $240 in the first quarter of this year.
``The current phase of Mountaineer's transformation into a destination resort and diversified entertainment complex
is on schedule. On June 11th, we broke ground on our new hotel, which will house 262 well-appointed rooms and suites.
On July 1st, we opened a Las Vegas-style `buffeteria' that has been well received by our customers and reduced
the waiting time for patrons in the Gatsby dining room. Next to open will be our new 39,000 square foot gaming
room scheduled for later this month, which will house 595 additional slot machines bringing our total at Mountaineer
to 2,500. Also in August, we plan to open our new convention center, which will be geared toward local associations
and should increase mid-week traffic. We are gradually implementing the increase in the maximum wager from $2.00
to $5.00 on our machines as the machine manufacturers gain Lottery Commission approval of the new chips, and expect
to complete the process by the end of September.
``Export simulcasting of Mountaineer races continues to have a broader reach and increasingly contribute to the
Company's revenues. During the second quarter, export simulcasting generated revenues of $784,000, an increase
of 38% from $567,000 in the first quarter of this year. Our average daily live handle, including export, was $831,600
in the second quarter, an increase of 13% from $734,500 in the first quarter. We added 10 new export outlets during
the quarter, bringing the total to over 220.''
Commenting on the Company's Nevada's properties, Mr. Arneault stated, ``As previously announced, last week we closed
the casino and one of the restaurants at our Reno property and laid off approximately 60 employees. We expect the
operating loss in Reno to be approximately $50,000 per month going forward, which compares to a total of approximately
$800,000 in the first quarter of this year and $586,000 in the second quarter. We are considering various alternatives
for the property, including selling the hotel to a time-share developer and retaining ownership or management of
the casino, as well as an outright sale of the property.
``Total revenues at our Speedway Property in North Las Vegas were up 21% to $2.1 million from the second quarter
of last year, but the property reduced the Company's earnings by $468,000 or $.02 per share. The Nevada subsidiaries
overall recorded total revenues of $3.4 million, up 18% from last year's second quarter, but lowered the Company's
earnings by $1.1 million or $.04 per share. We remain focused on exploring opportunities to reduce our capital
investment in Reno and achieve profitability at the Speedway.''
Recent Developments
Mr. Arneault continued, ``During the second quarter we announced that we filed an application to build a state-of-the-art
thoroughbred racetrack in Erie, Pennsylvania. Construction of the track, which would be located on a parcel of
approximately 135 acres, about 150 miles from Mountaineer, is subject to a number of contingencies and there is
no guarantee that the plans will be executed. We look forward to reporting our progress in this regard.''
On August 1st, Mountaineer's automated player tracking system went on-line, replacing a manual system. The Company
expects the automated player tracking system to generate valuable data concerning patron preferences as well as
provide incentives for players to avail themselves of all of the resort's amenities. The system should therefore
enable more efficient use of marketing and promotions dollars.
Also in August, the Company amended its credit facility to increase the available credit line from $60 million
to $75 million. The Company plans to use the additional funds, together with cash flow from operations, to complete
Phase II of the construction at Mountaineer and for the Erie project if approved by the Pennsylvania Horse Racing
Commission. The amendment also increases the amount available for the repurchase of the Company's common stock
from $3 million to $10 million, provided that the Company's twelve-month trailing EBITDA first reaches $50 million.
Mr. Arneault concluded, ``Due to our recent, imminent, and planned developments, we are enthusiastic about the
Company's prospects for the remainder of 2001 and beyond.''
Conference Call
Edson R. (Ted) Arneault, President and CEO, conducted a conference call focusing on the financial results and the
progress of the Company's expansion in West Virginia at 10:00 a.m. ET on Tuesday, August 7, 2001. The conference
call was broadcast live over the Internet via the Investor Relations section of the Company's web site at www.mtrgaming.com.
If you were unable to listen live, the conference call will be archived and can be accessed for approximately 90
days. A recorded phone replay of the call will also be available from 12:00 noon ET on Tuesday, August 7, 2001
to 12:00 noon ET on Wednesday, August 8, 2001. Listeners may dial 800-633-8284 (858-812-6440 for international
callers) and use the code 19489782 for the phone replay.
About MTR Gaming Group
MTR Gaming Group, Inc., a West Virginia-based corporation, through subsidiaries, owns and operates the Mountaineer
Racetrack & Gaming Resort in Chester, West Virginia, the Ramada Inn and Speedway Casino in North Las Vegas,
and the Ramada Inn in Reno, Nevada. The Mountaineer complex currently encompasses a thoroughbred racetrack, including
off track betting and export simulcasting, 1,905 video lottery terminals, a 101-room hotel, golf course, Spa &
Fitness Centre, fine dining and entertainment, the Speakeasy Gaming Saloon, and The Harv.
Except for historical information, this press release contains forward-looking statements concerning, among other
things, future plans and operating results. Such statements are based on the Company's current plans and expectations.
Actual results could differ materially based upon a number of factors, including but not limited to weather conditions,
adverse changes in West Virginia video lottery laws or the rates of taxation of video lottery operations, legalization
of new forms of gaming in the Company's target markets, which would lead to increased competition, competition,
general economic conditions affecting the resort business, dependence upon key personnel, market acceptance of
the Company's Nevada properties, maintaining the ``grandfathered'' status of the Nevada properties, timely delivery
and installation of slot machines, licensing and regulatory approval of the Company's planned Pennsylvania racetrack,
and other factors described in the Company's periodic reports filed with the Securities and Exchange Commission.
The Company does not intend, and is not required by the Private Securities Litigation Reform Act of 1995, to update
publicly any forward-looking statements
MTR GAMING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- ------------------------
2001 2000 2001 2000
------------- ----------- ----------- -----------
Revenues
Gaming $47,208,000 $36,666,000 $90,134,000 $68,413,000
Parimutuel
commissions 2,087,000 1,282,000 3,770,000 2,382,000
Food, beverage
and lodging 4,077,000 3,424,000 7,421,000 6,190,000
Other 919,000 723,000 1,524,000 1,166,000
------------- ----------- ----------- -----------
Total revenues 54,291,000 42,095,000 102,849,000 78,151,000
Costs of revenue
Cost of gaming 27,163,000 21,064,000 52,083,000 39,529,000
Cost of
parimutuel
commissions 1,687,000 1,372,000 3,210,000 2,687,000
Cost of food,
beverage and
lodging 4,053,000 3,133,000 7,690,000 5,702,000
Cost of other
revenue 1,224,000 615,000 1,952,000 986,000
------------- ----------- ----------- -----------
Total cost of
revenues 34,127,000 26,184,000 64,935,000 48,904,000
------------- ----------- ----------- -----------
Gross Profit 20,164,000 15,911,000 37,914,000 29,247,000
------------- ----------- ----------- -----------
Selling,
general and
administrative
expenses:
Marketing and
promotions 3,478,000 2,656,000 5,832,000 4,101,000
General and
administrative 5,799,000 4,585,000 11,478,000 8,910,000
Depreciation and
amortization 2,273,000 1,352,000 4,335,000 2,892,000
------------- ----------- ----------- -----------
Total selling,
general and
administrative
expenses 11,550,000 8,593,000 21,645,000 15,903,000
------------- ----------- ----------- -----------
Operating income 8,614,000 7,318,000 16,269,000 13,344,000
------------- ----------- ----------- -----------
Interest income 60,000 67,000 115,000 136,000
Interest expense (899,000) (634,000) (1,962,000) (1,454,000)
Non-recurring
income - - - -
------------- ----------- ----------- -----------
Income from
continuing
operations before
benefit/
(provision) for
income taxes 7,775,000 6,751,000 14,422,000 12,026,000
Benefit/
(Provision) for
income taxes (2,641,000) (2,434,000) (4,901,000) (4,341,000)
------------- ----------- ----------- -----------
Income from
continuing
operations 5,134,000 4,317,000 9,521,000 7,685,000
Cumulative effect
of FASB 133, net
of tax benefit - - (92,000) -
Net Income $5,134,000 $4,317,000 $9,429,000 $7,685,000
============= =========== =========== ===========
NET INCOME PER
SHARE - BASIC 0.22 0.20 0.41 0.36
NET INCOME PER
SHARE - ASSUMING
DILUTION 0.20 0.17 0.37 0.32
WEIGHTED AVERAGE
NUMBER OF
SHARES
OUTSTANDING
Basic 23,549,810 21,794,596 22,886,113 21,566,833
Diluted 26,266,467 24,733,577 25,449,100 24,227,201
MTR GAMING GROUP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
June 30, December 31,
2001 2000
------------- ------------
ASSETS
Current assets
Cash and cash equivalents $9,378,000 $10,564,000
Restricted cash 724,000 505,000
Accounts receivable, net of allowance
for doubtful accounts of $28,000,and
$37,000 4,228,000 3,044,000
Accounts receivable - Lottery Commission 2,289,000 1,073,000
Inventories 1,394,000 1,083,000
Deferred financing costs 555,000 555,000
Prepaid taxes 1,242,000 2,410,000
Other current assets 2,794,000 1,678,000
------------- ------------
Total current assets 22,604,000 20,912,000
------------- ------------
Property and equipment, net 111,355,000 90,501,000
Other assets:
Excess of cost of investments over net
assets acquired, net of accumulated
amortization of $2,156,000, and
$2,030,000 1,618,000 1,744,000
Deferred income taxes 13,000 13,000
Deferred financing costs, net of current
portion 1,600,000 1,860,000
Deposits and other 892,000 655,000
------------- ------------
$138,082,000 $115,685,000
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,237,000 $1,370,000
West Virginia State Lottery Commission
payable 160,000 646,000
Accrued payroll and payroll taxes 2,863,000 1,227,000
Accrued liabilities 1,627,000 1,755,000
Current portion of capital leases 3,424,000 3,269,000
Current portion of long-term and other
debt 350,000 334,000
------------- ------------
Total current liabilities 10,661,000 8,601,000
Long-term and other debt, less current
portion 60,713,000 56,021,000
Capital lease obligations, net of current
portion 4,286,000 3,849,000
Deferred income taxes 3,948,000 1,766,000
------------- ------------
Total liabilities 79,608,000 70,237,000
------------- ------------
Shareholders' equity:
Common stock - -
Paid in capital 43,263,000 39,014,000
Shareholders receivable (1,854,000) (1,243,000)
Accumulated deficit 17,065,000 7,677,000
------------- ------------
Total shareholders' equity 58,474,000 45,448,000
------------- ------------
$138,082,000 $115,685,000
============= ============
--------------------------------------------------------
Contact:
MTR Gaming Group, Inc.
Edson R. (Ted) Arneault, 304/387-8300
or
Investor Relations Counsel:
The Equity Group Inc.
Lauren Barbera, 212/836-9610
lbarbera@equityny.com
Loren G. Mortman, 212/836-9604
www.theequitygroup.com