Regional markets still struggling



"Our operating results continue to be impacted by the soft regional gaming trends and several of our properties were impacted by flooding and spring storms that occurred in the Midwest during May and June...Partially offsetting the softness were Pompano, Black Hawk, and Lake Charles which all experienced year over year increases in net revenue and combined adjusted EBITDA flow through of 60%. In Cape Girardeau we continue to refine our business model in order to ramp up the property....The increased adjusted EBITDA is a reflection of improved operating efficiencies and improved promotional spending.

"While customer feedback regarding the property (Nemacolin) has been extremely positive, initial results have not met our expectations.  Many local customers have told us they are having difficulty accepting the mandatory purchase requirement, which they view as an admission charge, that doesn't exist at other casinos in the region. We are exploring alternatives to make access to the casino more appealing and least disruptive to customers as possible. In addition we are making operating changes to match the level of customer demand."


-Virginia McDowell, President and Chief Executive Officer



  • Continue to reduce operating expenses at corporate office
  • Excluding one-time items FY2014, there would have been a penny of income
  • Because of valuation allowance, going forward in FY2014, tax provision will be $1.4MM/Quarter regardless of P&L
  • FQ1:  $169MM debt on revolver; $1.050 BN notes; $3MM - other debt
  • Leverage: 6.6x; borrowing capacity is $95MM

Q & A

  • Consumer trends:  similar to competitors' comments, they see a decline in trips but spend per visit was higher by $4.  Retail revenue and lower-end customers have been weak as well. Consistent trends across different markets. Revenues have been consistent.
  • Cape:  slower ramp due to pressure from lower end and retail (most profitable customers). Thus, they need to build on rated databases. Would need a couple of years to fully ramp on the property.
  • Philly license:  $25MM LoC mgmt fee - if project is elected, the fee may be returned or put into capital structure. Timing - fall 2013 or later
  • Vicksburg/Jackson road construction will be completed by the end of September
  • Focus on deleveraging the company
  • Lake Charles market impact from Fertitta purchase:  nothing will change 
  • Rhythm City casino sale:  moving forward on schedule; need to finalize with non-profit partner
  • Interest coverage: 2.2x
  • Good correlation between customer habits and stock market
  • Competitive environment:  a couple of markets (mainly new markets) have seen heightened promotions
  • $2MM annual cost savings:  3/4 of the savings have been in place (not fully recognized in Q1)
  • Pompano:  targeted marketing strategies benefited the property more than the removal of slots at internet cafes
  • FL legislature:  Disney actively involved
  • Additional Cedar Rapids license?  No demand for that market, says ISLE.  Waterloo will not be significantly impacted.
  • Lumiere:  ISLE did take a look at it
  • Maintenance capital on slot equipment:  pretty constant
  • NJ i-gaming:  federal solution would be best; NV and NJ pairing up. ISLE cannot pursue i-gaming license in NV

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