Press Release: Mandalay Resort Group
March 1, 2001
LAS VEGAS, NV -- Mandalay Resort Group (NYSE: MBG) yesterday announced its results for the fourth quarter and fiscal
year ended January 31, 2001.
For the fourth quarter, the company reported earnings of $.01 per share on an operating basis, equal to the fourth
quarter last year. After nonrecurring items, earnings for the quarter were $.04 per share versus a loss of $.06
in the quarter a year ago. Nonrecurring items in the current quarter reflect income of $3.6 million related to
reducing a liability assumed when the company acquired the Mandalay Bay site in 1995. In the prior year, nonrecurring
items represented preopening expenses of $9.1 million related primarily to the opening of MotorCity Casino in Detroit.
Mandalay Bay and Luxor, the company's two premier resorts, compared strongly against their performance in the prior
year's fourth quarter, when Y2K jitters affected travel to Las Vegas. Mandalay Bay posted operating cash flow of
$29.1 million in the quarter versus $17.8 million, while Luxor generated $24.9 million against $20.3 million. Excalibur,
for its part, was essentially flat in the quarter with $17.2 million of operating cash flow, while Circus Circus-Las
Vegas turned in $12.8 million versus $11.0 million. At Monte Carlo, which is 50% owned by Mandalay, operating cash
flow rose to $21.1 million from $19.0 million.
In Reno, Circus Circus and the company's portion of the Silver Legacy contributed $8.4 million in operating cash
flow, up from $7.2 million in the same quarter last year. But elsewhere in Nevada comparisons were off, particularly
as the Colorado Belle and Edgewater in Laughlin posted an operating loss of $800,000 against operating cash flow
of $3.4 million in the quarter last year. The growth of Native American gaming in California (following Proposition
5) has affected traffic to ancillary drive-in markets in Nevada.
The difficult winter in the Midwest and South hurt comparisons for the company's Illinois and Mississippi properties.
At the 50%-owned Grand Victoria in Elgin, Illinois, operating cash flow dipped slightly to $29.7 million in the
quarter against $30.4 million, while the Gold Strike in Tunica County, Mississippi generated $3.4 million versus
$6.5 million. The Tunica market has also experienced more intense competition, as visitor counts have slowed.
In Detroit, MotorCity Casino (53.5% owned by Mandalay) reported $17.8 million in operating cash flow in a full
quarter against $7.7 million in a partial quarter last year, when the property opened December 14, 1999. In January
2001, MotorCity Casino led the Detroit-based casino operators in gaming revenue for the first time.
For the quarter, Mandalay generated a total of $125.7 million in operating cash flow compared against $111.1 million
in the fourth quarter last year. Operating cash flow excludes operating lease rent and nonrecurring items, but
includes the company's share of depreciation from unconsolidated joint ventures. For the year, the company's operating
cash flow was $671.8 million versus $554.2 million in the prior fiscal year, an increase of 21%. Depreciation and
interest expense were higher in the quarter, as well as the year, which affected earnings per share. Both depreciation
and interest were impacted by a full year of operations at MotorCity Casino. Interest expense was also affected
by higher overall borrowing rates.
As previously announced, Mandalay will conducted a conference call yesterday via telephone and Webcast at 1:30
p.m. Pacific Time. The call was broadcast live via the internet at www.streetfusion.com.
A recording of the conference call will be available on the company's website at www.mandalayresortgroup.com
from 3:00 p.m. Pacific Time on February 28, 2001 through midnight Pacific Time on March 7, 2001. Those parties
interested in listening to the investor conference call via telephone should dial (212) 676-5191. A telephone replay
of the conference call will begin at 3:30 p.m. Pacific Time on February 28, 2001, and end at 3:30 p.m. Pacific
Time on March 7, 2001. To access the rebroadcast, please dial (800) 633-8284 for domestic calls, or (858) 812-6440
for international calls and enter code 17800753.
Mandalay Resort Group owns and operates 11 properties in Nevada: Mandalay Bay, Luxor, Excalibur, Circus Circus,
and Slots-A-Fun in Las Vegas; Circus Circus-Reno; Colorado Belle and Edgewater in Laughlin; Gold Strike and Nevada
Landing in Jean and Railroad Pass in Henderson. The company also owns and operates Gold Strike, a hotel/casino
in Tunica County, Mississippi. The company owns a 50% interest in Silver Legacy in Reno, and owns a 50% interest
in and operates Monte Carlo in Las Vegas. In addition, the company owns a 50% interest in and operates Grand Victoria,
a riverboat in Elgin, Illinois, and owns a 53.5% interest in and operates MotorCity in Detroit, Michigan.
MANDALAY RESORT GROUP
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data)
(UNAUDITED)
Three Months Ended Twelve Months Ended
January 31, January 31,
2001 2000 2001 2000
Revenues $598,751 $518,256 $2,524,224 $2,050,898
Costs and expenses 532,163 466,861 2,090,858 1,722,595
Preopening expense -- 9,144 1,832 49,134
Abandonment loss -- -- -- 5,433
Income from
operations 66,588 42,251 431,534 273,736
Interest expense (61,620) (51,136) (233,783) (176,755)
Other income 5,565 2,434 13,387 6,427
Minority interest (2,418) (292) (16,746) (292)
Income before
income tax 8,115 (6,743) 194,392 103,116
Income tax expense 4,696 (1,373) 74,692 38,959
Income before
cumulative effect
of a change in
accounting principle 3,419 (5,370) 119,700 64,157
Cumulative effect of
a change in
accounting for
preopening expenses,
net of tax benefit
of $11,843 -- -- -- (21,994)
Net income $3,419 ($5,370) $119,700 $42,163
Basic earnings
per share $0.04 ($0.06) $1.53 $0.47
Diluted earnings
per share $0.04 ($0.06) $1.50 $0.46
Average shares
outstanding
(basic) 76,271,040 90,431,248 78,334,735 90,607,487
Average shares
outstanding
(diluted) 77,556,457 91,754,896 79,700,614 91,896,224
SOURCE: Mandalay Resort Group