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"The ongoing pressure the macroeconomic environment is placing on our markets has negatively impacted our revenues. Overall, as we are bumping along the bottom of this economic cycle, we continue to generate free cash flow while managing with a solid operating plan and an eye towards increased future profitability."

- James B. Perry, Chairman and CEO


  • "During the quarter, while our average spend per visit declined, our successful marketing efforts produced an increase in the average number of visits per rated patron and led to a significant number of new customers to our database with whom we are building strong relationships."
  • "While we were able to decrease property operating expenses by approximately $4 million during the quarter, and while we continue to trim expenses wherever possible, we remain resolute that we will not cut costs to the point where they begin to negatively impact the customer experience and erode the important progress we have made."
  • "Average year-end unemployment in the areas in which we operate has risen from 7.0% to 9.2%, contributing to the decline in revenues. Through innovation and discipline in a tough market, though, we maintained our margins in many locations while we are also addressing specific instances where improvement must be made. Across the portfolio, we are committed to continued improvement in our operations to best position our properties in an increasingly competitive marketplace."
  • "As a result of the amendment to the Credit Facility, we expect to incur a charge of approximately $2.2 million in the fourth quarter of FY 2010 related to fees and the write-off of certain unamortized deferred financing costs, of which approximately $0.3 million is non-cash. Based on current debt levels, the Company expects interest expense to increase by approximately $15 million to $18 million annually, as a result of the amendment to the Credit Facility."
  • "Capital expenditures for the nine months ended January 24, 2010 totaled $21.6 million, which included approximately $18.3 million of maintenance capital expenditures. The Company expects maintenance capital expenditures for the rest of the fiscal year to be approximately $10 million."


  • Visibility as to the timing of a recovery is limited
  • No capitalized interest in the quarter
  • R/C is about $50MM drawn, $1.231BN in total debt
  • Covenant calculations: 5.2x leverage calculations (debt gain from a year ago is still in that number and rolling off in the 4Q09)
  • Amendment to Credit facility - expect interest expense in the $75-80MM range


  • Capex spend is commensurate with what they have seen in the industry.  Competitive spend depends on the market.
  • Iowa competitive landscape/ outlook?
    • Marquette's EBITDA was up 17%
    • Waterloo was up in both EBITDA and margins
    • Bettendorf had its best quarter in a year, because Jumer's has been lapped on a annual basis
  • Corporate expense will still be around $10MM for the year
  • Florida market - margin & EBITDA improved. One of the few signs of light. Saw a 5-6% increase in retail play in Pompano - first time they saw any lift in over a year.  Seeing more snowbirds than last year.
  • Asset sales?  Aren't actively looking to sell anything but are always receptive to attractive bids
  • Credit Facility allowing them to spend $100MM to seek management agreements?
    • Have a large basket of permitted investments ($200MM) under the credit agreement and this is just another bucket. Aren't looking to invest anywhere close to $100MM on any single investment
  • Swaps piece is still 8.5-9% (swapped on $400MM of the T/L)
  • Biloxi is just a function of competition. Black Hawk was also impacted by competition
    • Black Hawk - competitor spent a couple hundred million and so people are going to see that. ASCA grew the market and captured almost all that growth. Because ASCA grew the market - they have been able to keep their hotel at 90% occupancy on the weekends. Claim that ASCA is really promotional - but I guess for ASCA those are $$ well spent. Down significantly midweek though -  but still better than before the increase in loss limit. Rated play spend per visit is up but retail is way down.
  • Quad City convention center is benefiting them - see some rebound in the convention business
  • They are getting more revenues from higher tax environments (Pompano was up but Biloxi was down)
  • Sugarcane Bay and Kansas are the only other competitive threats coming online eventually for their portfolio
  • Have the ability to issue up to $300MM sub notes. They don't have any maturities for a couple of years.
  • Lake Charles has been a bit of a trial for them - Louisiana market and feeder markets in TX have been soft and they weren't as aggressive in marketing and cost controls.  Have a new team there focused on improving operations.  New team started in the 4th FY Q of 2009
  • The issue is that the volumes haven't declined as much as spend per visit, so its hard to adjust staffing without impacting service
  • Biloxi - issue is that they were the first up and running post Katrina because the casino is in the ballroom space. Which means that they miss out on holiday parties - since they don't have a space to host those.
  • The low hanging fruit is gone at this point.  Now they are just looking at ways to save money by cross training staff and increasing efficiencies
  • Florida's legislative session starts this week and ends in April (so will know shortly if anything is to pass) and TX is a long shot (they've failed to pass gaming legislation for 15 years now)