Still have time to blame the weather but cost cutting is a positive step
CONF CALL
- One of most brutal weather years ever
- Weakness in December moved into January
- Improved EBITDA margins at half of the portfolio
- Davenport sale: $12m reversal in tax provision
- 6.6x leverage ratio
Q & A
- February trends: same as Jan
- Upper end of customer database: trends remain ok
- Retail spending in FQ3: -3%, consistent with previous Qs
- Pompano: better results due to more favorable racing schedule, poker room doing well; looking at opportunities for expansion; net of promotional, higher in every customer segment; retail play down a little bit; some pressure from opening of Dania Jai Alai.
- MS: revenue battle ongoing; impact on new competitor in Natchez; competition from Arkansas
- Bettendorf: down in-line with the Quad City market
- Promotional environment: MS esp Vicksburg aggressive in free-play (ISLE market share up)
- Cape Girardeau: ramp was slower; taking out labor/food costs to match with lower volumes
- Firm sale? No comment on rumors.
- Potential to go land-based in Bettendorf
- MO, IA, CO: most impacted by weather
- 135% increase in # of days impacted by weather
- In markets not impacted by weather, revenue trends flat or a % of points lower
- Golden Nugget Q4 opening in Lake Charles: as much as 70% supply increase to market. Will be a battle
- Higher promotions line: promotions up in Cape Girardeau due to comps, also in Nemacolin; but advertising $$ lower
- Philly license will be awarded in April
- How to get out of negative EBITDA in Nemacolin: revenue decline based on seasonality; PA market tough; trying to mitigate $10 entry fee; cut wages; repaired games
- In dialogue with govt to see if entry fee can be eliminated
- Cash equivalents: A1, P1 paper or better
- Cage cash: $40-50MM
- Lake Charles: employment relatively stable
- May have flooding concerns as winter ends
- Nemacolin: Pay $150k rent, pay a % fee if revenue > $35MM
- Apart from Bettendorf project, primary focus is on delevering
- Maintenance capex run rate: $40-50MM (closer to $40s)
- D&A run rate: $80-85MM
