Ho hum quarter and future




  • "We were able to increase our property EBITDA by about 17% (11% on a same store basis) on increased revenues of only 2.4% in part as a result of the benefits of lower gaming taxes in Florida and because we are providing an improved guest experience, our marketing programs are driving more profitable business, and our team remains focused on fiscal discipline.  The efficiency we have created in our business is demonstrated by the fact that in the markets where we experienced increased revenues the flow through on year-over-year revenue changes was significant, ranging from about 40% in Marquette to a high of 154% in Waterloo. In addition we were able to increase EBITDA in Lake Charles and Biloxi despite revenue declines year over year."
  • "While we have not experienced a wide spread increase in consumer spending, we are capitalizing on specific areas of opportunity in our business, and have therefore been successful in achieving improved financial results. During the quarter we experienced a slight decline in rated visits that was offset by an increase in rated spend."
  • "Capital expenditures during the quarter totaled $20 million, of which $8 million related to Cape Girardeau and $12 million related to maintenance capital expenditures."
  • "The Company expects capital expenditures for the remainder of the fiscal year to be approximately $15 million consisting of $10 million in maintenance capital expenditures and $5 million related to Cape Girardeau."
  • Development Update:
    • Casino Cape Girardeau:
      • "Completed purchase of all land and demolition of existing structures is underway... In the process of selecting a general contractor, we expect to break ground in the summer of calendar 2011. The $125 million project, which will feature approximately 1,000 slot machines, 28 table games, three restaurants, a lounge and terrace overlooking the Mississippi River and a 750-seat event center, remains on schedule to open in late calendar 2012."
    • PA:
      • "In January, the Pennsylvania Gaming Control Board indefinitely delayed its decision on granting the state's final Category 3 resort gaming license... Since that time, two new gaming board members have been appointed and the Company has received no guidance with respect to the timing of any announcement regarding the license."


  • Faced weather issues in Dec and Jan that have continued into February
  • Over 50% of their properties saw higher retail spend.
  • Beginning to look for new COO
  • 79MM on R/C; 357 MM sub notes; 5MM of other debt . Total debt: 1.25 BN
  • Leverage: 6.75x; interest coverage: 2.27x


  • Believes no gaming tax hike for Iowa - not popular with public
  • In November, signed with potential developer for Davenport casino. Quiet period right now.
  • Lake Charles
    • Continue to strengthen customer relationships
    • Niche with little competition
    • Consider Houston secondary/tertiary market - a little lift from high oil prices
  • Vicksburg EBITDA:
    • Pressured from high unemployment
    • Lula-20th cons. quarter of declining gaming revs
    • Natchez - highly promotional market
  • Term loan: All term B
  • Amending revolver? Yes, when they do new credit facility
  • Bridge opening in Thanksgiving benefited Bettendorf results
  • Missouri has been particularly strong. Iowa had a good Q. Pressure continues to be in the South.
  • Biloxi: market continues to be tough; decline in Pensacola market; canceled fishing tournament.
  • Corp exp run rate: lower than expected insurance claims benefited FQ3; for the year, run rate is mid-30s on a cash basis + stock comp (in-line with previous guidance).
  • Stock comp for F4Q: 1.4-1.8 is better range.
  • Cape Girardeau: still in process of selecting a contractor
  • Competitive market:
    • Increased promotional activity in Quad Cities; Jumer's in particular
    • Biloxi, Vicksburg, and Lake Charles - high promotional environment
  • Other accrued liabilities: some swaps, timing of payments
  • Interest expense run rate is in-line with guidance; wouldn't change until construction cycle at Cape Girardeau
  • A good chunk of the improvement in Florida is due to the change in tax rate
  • Increase in retail revenue at about half of their properties which is more a profitable customer for them
  • Iowa removal of smoke exemption for casinos?
    • Tough to read the tea leaves

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