Exhibit 99.1
PINNACLE ENTERTAINMENT THIRD QUARTER REVENUES RISE 7.2% TO $295.9
MILLION AND OPERATING INCOME INCREASES TO $37.5 MILLION
MILLION AND OPERATING INCOME INCREASES TO $37.5 MILLION
— Record results at L’Auberge Lake
Charles and St. Louis Drive Consolidated
Adjusted EBITDA Increase of 16.3% to $68.7 Million, Net of Charges and Items
Affecting Comparability —
— Income from Continuing Operations Improves to $11.8 million —
Adjusted EBITDA Increase of 16.3% to $68.7 Million, Net of Charges and Items
Affecting Comparability —
— Income from Continuing Operations Improves to $11.8 million —
LAS VEGAS, NV, October 27, 2011 — Pinnacle Entertainment, Inc. (NYSE: PNK) today reported
financial results for the third quarter ended September 30, 2011, as summarized in the table below.
Third quarter revenues increased 7.2%, or $20.0 million, to $295.9 million from $275.9 million in
the third quarter of 2010. Consolidated Adjusted EBITDA(1) increased 16.3%, or $9.6
million, to $68.7 million, including several charges and items that affected comparability with the
year ago period that are detailed on the next page, versus $59.0 million in the 2010 third quarter.
Income from continuing operations was $11.8 million compared to $1.0 million in the prior year
period and operating income increased $14 million year over year to $37.5 million. In addition,
the Company is restating its 2011 second quarter results due to an accounting adjustment related to
player loyalty program expenses, which is discussed in detail further in this release.
Notwithstanding this non-cash accounting adjustment for mychoice related reward and incentive
expenses, the Company continues to administer the program in the same practical format, and at the
same associated cost, as indicated in its prior disclosure.
Summary of Third Quarter Results
| Three Months Ended | ||||||||
| September 30, | ||||||||
| ($ in thousands, except per share data) | 2011 | 2010 | ||||||
Net revenues |
$ | 295,853 | $ | 275,898 | ||||
Consolidated Adjusted EBITDA (1) |
$ | 68,656 | $ | 59,033 | ||||
Consolidated Adjusted EBITDA margin (1) |
23.2 | % | 21.4 | % | ||||
Income from continuing operations |
$ | 11,779 | $ | 1,021 | ||||
Income from continuing operations margin |
4.0 | % | 0.4 | % | ||||
Operating income (2) |
$ | 37,492 | $ | 23,521 | ||||
GAAP net income (loss) (3) |
$ | (790 | ) | $ | (766 | ) | ||
Diluted net earnings (loss) per share (3) |
$ | (0.01 | ) | $ | (0.01 | ) | ||
Adjusted income (loss) per share (4) |
$ | 0.23 | $ | 0.08 | ||||
| (1) | For a further description of Consolidated Adjusted EBITDA and Consolidated Adjusted
EBITDA margin, please see the section entitled “Non-GAAP Financial Measures” and the
reconciliations below. |
|
| (2) | Operating income in 2011 third quarter is inclusive of $1.3 million of impairments and
write-downs and operating income in 2010 third quarter is inclusive of $5.1 million of
impairments and write-downs. |
|
| (3) | GAAP net income and diluted income per share in 2011 third quarter includes a loss of
$12.6 million, or $(0.20) per share, net of taxes, from discontinued operations as
described below and a loss of $0.5 million, or $(0.01) per share, related to the Company’s
26% equity interest in Asian Coast Development (Canada) Ltd. GAAP net loss and diluted net
loss per share in 2010 third quarter include a loss of $1.8 million, or $(0.03) per share,
net of taxes, from discontinued operations. |
|
| (4) | For a further description of Adjusted income (loss) per share, please see the section
entitled “Non-GAAP Financial Measures” and the reconciliations below. |
Total net revenues and Consolidated Adjusted EBITDA in the 2011 third quarter were affected by
the following charges and items:
| • | Net revenue and Adjusted EBITDA(2) for Boomtown New Orleans was impacted by
the property’s closure for several days over Labor Day weekend due to Tropical Storm Lee
and subsequent flooding disruption in the region. Based upon the property’s performance
over comparable days in the year-ago period, management estimates Boomtown New Orleans
Adjusted EBITDA was negatively impacted by approximately $0.9 million due to this closure
and disruption. |
| • | Adjusted EBITDA for Belterra Casino Resort and River Downs were impacted by unusually
high medical claim expenses of $0.5 million and $0.3 million, respectively. Belterra’s
Adjusted EBITDA in the 2010 third quarter included a one-time benefit of $0.8 million from
the resolution of a tax matter, affecting comparability with the 2011 third quarter. |
| • | During the quarter, Boomtown Reno was classified as a discontinued operation. The
Company recorded a non-cash charge of approximately $11.9 million or $0.19 per share to
write-down the assets. The property generated $12.0 million in revenue and $1.0 million in
Adjusted EBITDA in the 2011 third quarter and $11.9 million in revenue and $1.2 million in
Adjusted EBITDA in the 2010 third quarter. Prior year results in this press release have
been adjusted to reflect Boomtown Reno as a discontinued operation. The Company is
currently in negotiations to sell Boomtown Reno and the majority of its adjoining acreage. |
Anthony Sanfilippo, president and chief executive officer of Pinnacle Entertainment, commented, “On
an operating basis, Pinnacle had another very strong quarter led by record performances at our
L’Auberge Lake Charles and St. Louis properties. While several charges and other items affected
year over year comparability, our third quarter results again highlight the effectiveness of our
revenue growth and operational improvement initiatives.
“Adjusting for the Boomtown New Orleans closure and a one-time tax benefit at Belterra in the
year-ago quarter, Pinnacle’s overall property level Adjusted EBITDA improved 15.7% year over year,
or $10.3 million, to $75.7 million. Corporate expense declined 14.2%, or $1.0 million, compared to
the year ago period and operating profitability continues to improve.
“This performance continues to demonstrate that our strategies to elevate the guest experience at
our properties, leverage the industry-unique benefits of our mychoice guest loyalty program, and a
team-wide commitment to implementing operational best practices are driving profitable revenue
growth. At the same time, Pinnacle’s strong operating results provide a solid foundation and
financial flexibility for the Company to build shareholder value from our diversified,
return-focused growth pipeline.”
Third quarter revenue and Consolidated Adjusted EBITDA growth was primarily driven by the continued
solid performance of the Company’s St. Louis segment, which consists of Lumière Place and River
City Casino, and at L’Auberge Lake Charles.
The Company’s St. Louis segment continues to ramp-up. Net revenues for the St. Louis segment
increased 6.6% and Adjusted EBITDA rose 30.2%, or $5.2 million, to $22.3 million. Adjusted EBITDA
margin of 22.7% for the St. Louis segment compares to 18.6% in the prior year period.
Revenues for L’Auberge Lake Charles rose 12.8%, or $11.1 million, to a quarterly property record
$98.2 million. Adjusted EBITDA rose 24.3% to $29.7 million. L’Auberge Lake Charles Adjusted
EBITDA margin of 30.2% compares to 27.4% in the year-ago period, an increase of 279 basis points
year over year.
Revenues for Belterra Casino Resort rose 3.6% to $42.1 million, while Adjusted EBITDA for the
property declined 8.7% to $8.7 million from $9.5 million in the year ago period. Belterra’s
Adjusted EBITDA margin declined 276 basis points year over year to 20.6%. Several items affected
these results, as Belterra’s Adjusted EBITDA in the current period includes a $0.5 million charge
related
to abnormally high medical claim expenses, while the year ago period included a $0.8 million
one-time benefit from the resolution of a tax matter.
Boomtown New Orleans Adjusted EBITDA declined 3.6% on a 6.1% decrease in revenues. During the 2011
third quarter, Boomtown New Orleans was closed for several days over the Labor Day weekend due to
Tropical Storm Lee and subsequent flooding disruption in the region. Boomtown Bossier City’s
Adjusted EBITDA and revenue declined 8.5% and 2.8%, respectively.
River Downs Racetrack in Cincinnati, which was acquired in the first quarter of 2011, with the
intention to renovate it as a video lottery terminal (“VLT”) facility, contributed $3.9 million in
revenues and an Adjusted EBITDA loss of $0.7 million in the 2011 third quarter. River Downs
recognized a $0.3 million charge during the 2011 third quarter related to abnormally high medical
claim expenses.
Successfully Improving Operating Results
Mr. Sanfilippo commented, “Our commitment to offer best-in-market entertainment and hospitality
experiences for our guests combined with the industry’s most innovative casino loyalty program is
improving our competitive position across our property portfolio. Our St. Louis segment and
L’Auberge Lake Charles are consistently achieving record or near their highest-ever levels of
monthly market share as guests increasingly choose these properties as their preferred gaming
entertainment destinations.
“With the appointment of new general managers at each of our properties over the last 18 months, we
are taking fresh company-wide approaches to what drives higher levels of guest satisfaction and
consistently refining offerings to meet consumers’ specific needs in each market. These changes
include prudent re-investment in property enhancements, a fine-tuning of property amenities and our
commitment to keep our gaming floors fresh and exciting. Taken collectively, this focus has been
successful in distinguishing Pinnacle’s properties from the competition.
“Pinnacle’s mychoice guest loyalty program was re-launched earlier this year and continues to be
very favorably received. While still relatively early in its implementation, the enhanced mychoice
program is accomplishing our primary goals of increasing play consolidation at our properties and
attracting new, in-market customers while improving yields from our marketing and promotional
activities and budget.
“In addition, by leveraging management expertise across multiple properties in Louisiana and at our
St. Louis, Belterra and River Downs properties through our shared services initiatives, we continue
to create synergies that are driving higher levels of operational excellence. As a result of our
comprehensive approach to growing revenues and implementing operational best practices, we are
generating steady increases in spend per visit, particularly in our most profitable customer tiers,
as well as operating margin improvements which together result in profitable revenue growth.”
Restating 2011 Second Quarter Financials
During the re-launch of the Company’s mychoice program in the 2011 second quarter, the Company
expensed costs associated with the program as incurred, or as benefits were enjoyed by program
members. Previously reported 2011 second quarter financial results reflected this
accounting treatment. During the 2011 third quarter, upon further review of the applicable
accounting guidance, the Company determined that a methodology change and adjustment was required.
The change in the accounting methodology of mychoice has no cash implications on the actual
incurrence of costs related to the program.
In the adjustment, all benefits given to members under the re-launched mychoice program are
expensed immediately in the 2011 second quarter. This expense adjustment relates to benefits
enjoyed by customers during 2011, as well as 2012 and in some instances part of 2013. The Company
is also expensing anticipated costs related to providing 2012 benefits during 2011, as customers
accumulate points under the program towards next year’s status level. As a result, the Company is
restating its financial results for the 2011 second quarter to conform to this change.
These adjustments resulted in an additional expense of $10.2 million to 2011 second quarter
previously reported financial statements. The Company intends to file amended financial statements
in a Form 10-Q/A for the quarterly period ended June 30, 2011. The nine months ending September
30, 2011 financial data in this release reflects these adjustments.
Notwithstanding the non-cash adjustment for mychoice related reward and incentive expenses, the
Company continues to administer the program in the same practical format, and at the same
associated cost, as indicated in its prior disclosure.
Development Pipeline
“Pinnacle’s improving operating results, solid balance sheet, significant free cash flow and
capital structure, which has no near term maturities, provides the Company with the flexibility to
address our development pipeline of return-focused opportunities within our portfolio and other
expansion projects,” said Carlos Ruisanchez, executive vice president and chief financial officer
of Pinnacle Entertainment.
“Pinnacle is successfully executing on revenue and operating cash flow growth strategies that are
benefiting our current operations. Our portfolio of development projects will diversify our
operations and provide favorable returns on invested capital. We remain focused on operational
excellence and the pursuit of potential new opportunities to create additional value for
shareholders.
“L’Auberge Casino & Hotel Baton Rouge remains on track to open in summer 2012. We believe our
facility will be best-in-class in the regional market and will contribute meaningfully to our
operating results.”
Construction of the facility is moving at a faster pace since waters on the Mississippi river
subsided earlier in the third quarter to allow construction to resume on the hotel and casino.
Reflecting the combination of nearly seven months in construction disruption and previously
unanticipated site preparation work recently mandated by the Army Corps of Engineers following
historically high river levels earlier in the year, management expects the construction budget for
L’Auberge Casino & Hotel Baton Rouge to increase by up to 3.0% from the prior budget of $357
million. As of September 30, 2011, approximately $110 million of the budget had been invested. A
complete project fact sheet and project webcam can be found at www.pnkinc.com under the
“New Developments” section.
Ruisanchez added, “Plans to redevelop River Downs Racetrack in southeast Cincinnati, into a premier
racing and gaming entertainment destination that is planned to include up to 2,500 VLTs and new
amenities, continue to progress. Timing will be dependent upon, among other things, the
finalization of authorization of VLTs in Ohio.
“We also recently announced an $82 million River City expansion that includes a new 200-room hotel,
a covered parking structure with approximately 1,700 spaces and a 10,000 square foot multi-purpose
event center. These enhancements address both property-specific and broader market needs and will
further elevate the level of guest amenities and entertainment options offered. The Company plans
to stagger construction to minimize customer disruption and expects to begin work on the parking
structure in the first quarter of 2012.
The Company also completed its previously announced transaction with Asian Coast Development
(Canada) Ltd. during the third quarter, where for total consideration of $95 million it acquired a
26% ownership stake in ACDL and secured a long-term management contract for a second gaming
integrated resort on the Ho Tram Strip in Southern Vietnam. The first phase of the development,
which will be the first fully integrated resort project in the country and will be managed by MGM
International, is expected to open by the end of the first quarter of 2013. The Ho Tram Strip
investment provides the Company with an attractive, unique entry to the fast-growing Southeast
Asian gaming market and management believes it will also serve as a platform for future
opportunities in this very attractive market.”
Additional Recent Developments
| • | In August, the Company entered into an amended and restated revolving credit agreement.
Among other changes, the size of the credit facility was increased from $375 million to
$410 million and the maturity date was extended from March 2014 to August 2016.
Additionally, the effective interest rate was reduced throughout the pricing grid, with a
current interest rate of 250 basis points over LIBOR compared to the previous effective
interest rate of 375 basis points over LIBOR. |
| • | During the quarter, the Company made open market purchases, at par and from cash on
hand, of $10.0 million of its outstanding 7.5% Senior Subordinated Notes due 2015. The
Company recorded a $0.2 million loss on early extinguishment of debt as a result of these
transactions, related to the partial write off of unamortized deferred financing fees. |
| • | Effective in the third quarter of 2011, the Company classified Boomtown Reno as a
discontinued operation and recorded a non-cash charge of $11.9 million to write-down the
related assets. Prior year results in this press release have been restated to reflect
Boomtown Reno as a discontinued operation. While a definitive agreement is yet to be
reached, the Company is currently in negotiations for the sale of the Boomtown Reno’s
casino-resort operations and adjoining acreage. |
Liquidity
At September 30, 2011, the Company had approximately $83.3 million in cash and cash equivalents, an
estimated $65 million of which is used in day-to-day operations. As of the end of the 2011 third
quarter, $32 million of the Company’s $410 million credit facility was drawn and approximately $9.8
million of letters of credit were outstanding.
Interest Expense
Gross interest expense before capitalized interest was $27.1 million in the 2011 third quarter
versus $28.0 million in the prior-year period. Capitalized interest in the 2011 third quarter,
related to the Company’s L’Auberge Baton Rouge growth project and ACDL investment was $2.9 million.
There was minimal capitalized interest in the prior-year period.
Discontinued Operations
Discontinued operations consist of the Company’s Atlantic City, New Jersey and Boomtown Reno
assets, which are being marketed for sale; its former President Riverboat Casino in St. Louis,
Missouri; its former Casino Magic Argentina operations; its former Casino Magic Biloxi, Mississippi
operations; and its former Bahamian operations. For the three months ended September 30, 2011, the
Company recorded a loss of $12.6 million, net of income taxes, related to its discontinued
operations. This loss reflects the write-down of assets in Boomtown Reno totaling $11.9 million in
the third quarter. For the prior-year period, the Company recorded a loss of $1.8 million, net of
income taxes, related to its discontinued operations.
Investor Conference Call
The Company will hold a conference call for investors today, Thursday, October 27, 2011, at 10:00
a.m. ET (7:00 a.m. PT) to discuss its 2011 third quarter financial and operating results.
Investors may listen to the call by dialing (888) 792-8395 or, for international callers, (706)
679-7241. Investors may also listen to the conference call live over the Internet at
www.pnkinc.com.
A replay of the conference call will be available shortly after the conclusion of the call through
November 10, 2011 by dialing (800) 585-8367 or, for international callers, (404) 537-3406. The
code to access the replay is 17838973. The conference call will also be available for replay at
www.pnkinc.com.
(1) Non-GAAP Financial Measures
Consolidated Adjusted EBITDA, Consolidated Adjusted EBITDA margin, Adjusted net income (loss), and
Adjusted income (loss) per share are non-GAAP measurements. The Company defines Consolidated
Adjusted EBITDA as earnings before interest income and expense, income taxes, depreciation,
amortization, pre-opening and development expenses, non-cash share-based compensation, asset
impairment costs, write-downs, reserves, recoveries, corporate-level litigation settlement costs,
gain (loss) on sale of certain assets, loss on early extinguishment of debt, gain (loss) on sale of
equity security investments, minority interest and discontinued operations. The Company defines
Adjusted net income (loss) as net income (loss) before pre-opening and development expenses, asset
impairment costs, write-downs, reserves, recoveries, corporate-level litigation settlement costs,
gain (loss) on sale of certain assets, gain (loss) on early extinguishment of debt, minority
interest and discontinued operations. The Company defines Adjusted income (loss) per share as net
income (loss) before pre-opening and development expenses, asset impairment costs, write-downs,
reserves, recoveries, corporate-level litigation settlement costs, gain (loss) on sale of certain
assets, gain (loss) on early extinguishment of debt, minority interest and discontinued operations
divided by the number of shares of the Company’s common stock outstanding. The Company defines
Consolidated Adjusted EBITDA margin as Consolidated Adjusted EBITDA divided by revenues on a
consolidated basis. Not all of the aforementioned benefits and costs occur in each reporting
period, but have been included in the definition based on historical activity.
The Company uses Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA margin as relevant
and useful measures to compare operating results between accounting periods. The presentation of
Consolidated Adjusted EBITDA has economic substance because it is used by management as a
performance measure to analyze the performance of its business. Consolidated Adjusted EBITDA is
specifically relevant in evaluating large, long-lived casino-hotel projects because it provides a
perspective on the current effects of operating decisions separated from the substantial,
non-operational depreciation charges and financing costs of such projects. Management eliminates
the results from discontinued operations as they are discontinued. Management also reviews
pre-opening and development expenses separately, as such expenses are also included in total
project costs when assessing budgets and project returns, and because such costs relate to
anticipated future revenues and income. Management believes some investors consider Consolidated
Adjusted EBITDA to be a useful measure in determining a company’s ability to service or incur
indebtedness and for estimating a company’s underlying cash flows from operations before capital
costs, taxes and capital expenditures. Consolidated Adjusted EBITDA also approximates the measures
used in the debt covenants within the Company’s debt agreements. Consolidated Adjusted EBITDA does
not include depreciation or interest expense and therefore
does not reflect current or future capital expenditures or the cost of capital. The Company
compensates for these limitations by using other comparative measures to assist in the evaluation
of operating performance.
Adjusted net income (loss) is presented solely as supplemental disclosure, as this is one method
that management reviews and uses to analyze the performance of its core operating business. For
many of the same reasons mentioned above relating to Consolidated Adjusted EBITDA, management
believes Adjusted net income (loss) and Adjusted income (loss) per share are useful analytic tools
as they enable management to track the performance of its core casino operating business separate
and apart from factors that do not impact decisions affecting its operating casino properties, such
as impairments of intangible assets or costs associated with the Company’s development activities.
Management believes Adjusted net income (loss) and Adjusted income (loss) per share are useful to
investors since these adjustments provide a measure of performance that more closely resembles
widely used measures of performance and valuation in the gaming industry. Adjusted net income
(loss) and Adjusted income (loss) per share do not include the costs of the Company’s development
activities, certain asset sale gains, or the costs of its refinancing activities, but the Company
compensates for these limitations by using other comparative measures to assist in evaluating the
performance of its business.
EBITDA measures, such as Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA margin, and
Adjusted net income (loss) are not calculated in the same manner by all companies and, accordingly,
may not be an appropriate measure of comparing performance among different companies. See the
attached “supplemental information” tables for a reconciliation of Consolidated Adjusted EBITDA to
Income (loss) from continuing operations, a reconciliation of GAAP net income to Adjusted net
income (loss), a reconciliation of GAAP income (loss) per share to Adjusted income (loss) per share
and a reconciliation of Consolidated Adjusted EBITDA margin to Income (loss) from continuing
operations margin.
(2) Adjusted EBITDA and Adjusted EBITDA Margin for Operating Segments
The Company defines Adjusted EBITDA for each operating segment as earnings before interest income
and expense, income taxes, depreciation, amortization, pre-opening and development expenses,
non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, gain
(loss) on sale of certain assets, gain (loss) on early extinguishment of debt, gain (loss) on sale
of discontinued operations, and discontinued operations. The Company defines Adjusted EBITDA
margin for each operating segment as Adjusted EBITDA divided by revenues. The Company uses
Adjusted EBITDA and Adjusted EBITDA margin to compare operating results among its properties and
between accounting periods.
About Pinnacle Entertainment
Pinnacle Entertainment, Inc. owns and operates seven casinos, located in Louisiana, Missouri,
Indiana and Nevada, and a racetrack in Ohio. Pinnacle is also developing L’Auberge Casino & Hotel
Baton Rouge and also owns a 26% stake in Asian Coast Development (Canada) Ltd., an international
development and real estate company currently developing Vietnam’s first large-scale integrated
resort.
All statements included in this press release, other than historical information or statements
of historical fact, are “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements, including statements regarding the Company’s future operating
performance; future growth; ability to implement strategies to improve revenues and operating
margins at the Company’s properties; ability to successfully implement marketing and branding
programs to increase revenue at the Company’s properties; continued operating improvement at the
Company’s St. Louis properties and anticipated milestones; completion and opening schedule of the
Company’s various project; the facilities, features and amenities of the Company’s various
project; the possibility for video lottery terminals becoming operational at Ohio racetracks; the
ability of the Company to develop a new gaming and entertainment facility at River Downs; the
ability of the Company to enter into an agreement to sell Boomtown Reno; the ability to sell or
otherwise dispose of discontinued operations, the Ho Tram Strip, potential growth for ACDL and
potential growth of the gaming markets in Vietnam and throughout Asia, the completion of the first
integrated resort of the Ho Tram Strip, the expected returns of the Company’s various development
projects and investments, and the ability of the Company to borrow as it constructs its various
projects under its Credit Facility, are based on management’s current expectations and are subject
to risks, uncertainties and changes in circumstances that could significantly affect future
results. Accordingly, Pinnacle cautions that the forward-looking statements contained herein are
qualified by important factors that could cause actual results to differ materially from those
reflected by such statements. Such factors include, but are not limited to: (a) the Company’s
business may be sensitive to reductions in consumers’ discretionary spending as a result of
downturns in the economy; (b) the global financial crisis may have an impact on the Company’s
business and financial condition in ways that the Company currently cannot accurately predict; (c)
significant competition in the gaming industry in all of the Company’s markets could adversely
affect the Company’s profitability; (d) the Company will have to meet the conditions for receipt or
maintenance of gaming licensing approvals for the Baton Rouge project, some of which are beyond its
control; (e) many factors, including the escalation of construction costs beyond increments
anticipated in its construction budget and unexpected construction delays, could prevent the
Company from completing its Baton Rouge project within budget and on time and as required by the
conditions of the Louisiana Gaming Control Board; (f) video lottery terminals may not become
operational at Ohio’s racetracks; (g) the terms of the Company’s credit facility and the indentures
governing its senior and subordinated indebtedness impose operating and financial restrictions on
the Company; (h) the Company may not enter into agreements to sell Boomtown Reno and its adjoining
acreage, and may experience delays in entering into an agreement due to circumstances beyond its
control; (i) the Company may not realize gains on the Company’s investment in ACDL; the Company’s
involvement in Vietnam could expose us to risks associated with violations of the Foreign Corrupt
Practices Act or applicable anti-money laundering regulations, which could have a negative impact
on the Company; (j) many factors, including the escalation of construction costs beyond increments
anticipated in construction budgets, could prevent ACDL from completing its Ho Tram development
project within budget and on time and as required by the conditions
of its certificate in Vietnam;
(k) ACDL will have to obtain all necessary approvals for completing the Ho Tram development
project, including gaming and regulatory approvals, some of which are beyond its control; and (l)
other risks, including those as may be detailed from time to time in the Company’s filings with the
Securities and Exchange Commission (“SEC”). For more information on the potential factors that
could affect the Company’s financial results and business, review the Company’s filings with the
SEC, including, but not limited to, its Annual Report on Form 10-K, its Quarterly Reports on Form
10-Q and its Current Reports on Form 8-K.
Belterra, Boomtown, Casino Magic, L’Auberge, Lumière Place, River City, and River Downs are
registered trademarks of Pinnacle Entertainment, Inc. All rights reserved.
Investor Relations
|
Media Relations | |
Vincent Zahn
|
Kerry Andersen |
VP, Finance and Investor Relations
|
Director, Public Relations | |
702/541-7777 or investors@pnkmail.com
|
337/395-7631 or kandersen@pnkmail.com |
Richard Land, Jim Leahy
Jaffoni & Collins Incorporated
212/835-8500 or pnk@jcir.com
Jaffoni & Collins Incorporated
212/835-8500 or pnk@jcir.com
— financial tables follow —
Pinnacle Entertainment, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data, unaudited)
Condensed Consolidated Statements of Operations
(In thousands, except per share data, unaudited)
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Gaming |
$ | 254,548 | $ | 240,344 | $ | 755,580 | $ | 696,623 | ||||||||
Food and beverage |
18,665 | 17,827 | 53,027 | 49,155 | ||||||||||||
Lodging |
11,505 | 10,785 | 29,165 | 28,374 | ||||||||||||
Retail, entertainment and other |
11,135 | 6,942 | 27,641 | 18,684 | ||||||||||||
| 295,853 | 275,898 | 865,413 | 792,836 | |||||||||||||
Expenses and other costs: |
||||||||||||||||
Gaming |
142,612 | 136,199 | 428,499 | 394,081 | ||||||||||||
Food and beverage |
18,423 | 17,262 | 53,042 | 49,395 | ||||||||||||
Lodging |
5,534 | 6,036 | 15,864 | 16,639 | ||||||||||||
Retail, entertainment and other |
6,802 | 2,845 | 16,601 | 8,303 | ||||||||||||
General and administrative |
55,445 | 55,777 | 166,878 | 166,173 | ||||||||||||
Depreciation and amortization |
25,770 | 27,939 | 77,886 | 81,936 | ||||||||||||
Pre-opening and development costs |
2,465 | 1,201 | 7,174 | 12,171 | ||||||||||||
Impairment of indefinite-lived intangible assets |
— | — | — | 11,500 | ||||||||||||
Impairment of land and construction costs |
— | 4,773 | — | 23,164 | ||||||||||||
Write-downs, reserves and recoveries, net |
1,310 | 345 | 7,930 | (4,048 | ) | |||||||||||
| 258,361 | 252,377 | 773,874 | 759,314 | |||||||||||||
Operating income |
37,492 | 23,521 | 91,539 | 33,522 | ||||||||||||
Other non-operating income |
127 | 68 | 290 | 224 | ||||||||||||
Interest expense, net of capitalized interest |
(24,161 | ) | (27,923 | ) | (76,001 | ) | (76,292 | ) | ||||||||
Loss on early extinguishment of debt |
(183 | ) | — | (183 | ) | (1,852 | ) | |||||||||
Income (loss) from equity method investment |
(544 | ) | — | (544 | ) | — | ||||||||||
Income (loss) from continuing operations before
income taxes |
12,731 | (4,334 | ) | 15,101 | (44,398 | ) | ||||||||||
Income tax (expense) benefit |
(952 | ) | 5,355 | (2,594 | ) | 7,021 | ||||||||||
Income (loss) from continuing operations |
11,779 | 1,021 | 12,507 | (37,376 | ) | |||||||||||
Income (loss) from discontinued operations,
net of income taxes |
(12,569 | ) | (1,787 | ) | (40,014 | ) | 24,039 | |||||||||
Net income (loss) |
$ | (790 | ) | $ | (766 | ) | $ | (27,507 | ) | $ | (13,337 | ) | ||||
Net income (loss) per common share—basic |
||||||||||||||||
Income (loss) from continuing operations |
$ | 0.19 | $ | 0.02 | $ | 0.20 | $ | (0.62 | ) | |||||||
Income (loss) from discontinued operations,
net of income taxes |
$ | (0.20 | ) | $ | (0.03 | ) | $ | (0.65 | ) | $ | 0.40 | |||||
Net income (loss) per common share—basic |
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.45 | ) | $ | (0.22 | ) | ||||
Net income (loss) per common share—diluted |
||||||||||||||||
Income (loss) from continuing operations |
$ | 0.19 | $ | 0.02 | $ | 0.20 | $ | (0.62 | ) | |||||||
Income (loss) from discontinued operations,
net of income taxes |
$ | (0.20 | ) | $ | (0.03 | ) | $ | (0.65 | ) | $ | 0.40 | |||||
Net loss per common share—diluted |
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.45 | ) | $ | (0.22 | ) | ||||
Number of shares—basic |
62,059 | 61,128 | 61,940 | 60,654 | ||||||||||||
Number of shares—diluted |
62,059 | 61,128 | 61,940 | 60,654 | ||||||||||||
Pinnacle Entertainment, Inc.
Condensed Consolidated Balance Sheets
(In thousands, audited)
Condensed Consolidated Balance Sheets
(In thousands, audited)
| September 30, | ||||||||
| 2011 | December 31, | |||||||
| (Unaudited) | 2010 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 83,294 | $ | 194,925 | ||||
Other assets, including restricted cash |
280,928 | 152,277 | ||||||
Land, buildings, riverboats and equipment, net |
1,480,485 | 1,439,521 | ||||||
Assets of discontinued operations held for sale |
66,885 | 97,071 | ||||||
Total assets |
$ | 1,911,592 | $ | 1,883,794 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Liabilities, other than long-term debt |
$ | 203,929 | $ | 189,226 | ||||
Long-term debt, including current portion |
1,199,634 | 1,176,717 | ||||||
Liabilities of discontinued operations held for sale |
11,506 | 6,928 | ||||||
Deferred income taxes |
3,553 | 3,553 | ||||||
Total liabilities |
1,418,621 | 1,376,424 | ||||||
Stockholders’ equity |
492,970 | 507,370 | ||||||
Total liabilities and stockholders’ equity |
$ | 1,911,592 | $ | 1,883,794 | ||||
Pinnacle Entertainment, Inc.
Supplemental Information
Property Revenues and Adjusted EBITDA,
Reconciliation of Consolidated Adjusted EBITDA to Income (Loss) from Continuing
Operations, and Reconciliation of Consolidated Adjusted EBITDA Margin
to Income (Loss) from Continuing Operations Margin
Supplemental Information
Property Revenues and Adjusted EBITDA,
Reconciliation of Consolidated Adjusted EBITDA to Income (Loss) from Continuing
Operations, and Reconciliation of Consolidated Adjusted EBITDA Margin
to Income (Loss) from Continuing Operations Margin
(In thousands, unaudited)
| For the three | ||||||||||||||||
| months | For the nine months | |||||||||||||||
| ended September | ended September | |||||||||||||||
| 30, | 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
||||||||||||||||
L’Auberge Lake Charles |
$ | 98,175 | $ | 87,043 | $ | 283,103 | $ | 257,092 | ||||||||
St. Louis (a) |
98,406 | 92,287 | 288,461 | 249,479 | ||||||||||||
Boomtown New Orleans |
32,144 | 34,221 | 102,518 | 103,236 | ||||||||||||
Belterra Casino Resort |
42,056 | 40,614 | 117,338 | 115,829 | ||||||||||||
Boomtown Bossier City |
21,114 | 21,730 | 65,434 | 67,192 | ||||||||||||
River Downs (b) |
3,927 | — | 8,460 | — | ||||||||||||
Other |
31 | 3 | 99 | 8 | ||||||||||||
Total Revenues |
$ | 295,853 | $ | 275,898 | $ | 865,413 | $ | 792,836 | ||||||||
Adjusted EBITDA (Loss) (c) |
||||||||||||||||
L’Auberge Lake Charles |
$ | 29,672 | $ | 23,876 | $ | 79,520 | $ | 69,995 | ||||||||
St. Louis (a) |
22,343 | 17,155 | 63,296 | 46,811 | ||||||||||||
Boomtown New Orleans |
10,254 | 10,634 | 34,227 | 31,676 | ||||||||||||
Belterra Casino Resort |
8,675 | 9,499 | 21,938 | 23,669 | ||||||||||||
Boomtown Bossier City |
4,626 | 5,058 | 14,638 | 16,270 | ||||||||||||
River Downs (b) |
(746 | ) | — | (1,696 | ) | — | ||||||||||
| 74,824 | 66,222 | 211,923 | 188,421 | |||||||||||||
Corporate expenses |
(6,168 | ) | (7,189 | ) | (22,031 | ) | (25,446 | ) | ||||||||
Consolidated Adjusted EBITDA (c) |
$ | 68,656 | $ | 59,033 | $ | 189,892 | $ | 162,975 | ||||||||
Reconciliation to Income (Loss) from
Continuing Operations |
||||||||||||||||
Consolidated Adjusted EBITDA |
$ | 68,656 | $ | 59,033 | $ | 189,892 | $ | 162,975 | ||||||||
Pre-opening and development costs |
(2,465 | ) | (1,201 | ) | (7,174 | ) | (12,171 | ) | ||||||||
Non-cash share-based compensation |
(1,619 | ) | (1,254 | ) | (5,363 | ) | (4,729 | ) | ||||||||
Impairment of indefinite-lived intangible assets |
— | — | — | (11,500 | ) | |||||||||||
Impairment of land and construction costs |
— | (4,773 | ) | — | (23,164 | ) | ||||||||||
Write-downs, reserves and recoveries, net |
(1,310 | ) | (345 | ) | (7,930 | ) | 4,048 | |||||||||
Depreciation and amortization |
(25,770 | ) | (27,939 | ) | (77,886 | ) | (81,936 | ) | ||||||||
Other non-operating income |
127 | 68 | 290 | 224 | ||||||||||||
Interest expense, net of capitalized interest |
(24,161 | ) | (27,923 | ) | (76,001 | ) | (76,292 | ) | ||||||||
Loss on early extinguishment of debt |
(183 | ) | — | (183 | ) | (1,852 | ) | |||||||||
Income/loss from equity method investment |
(544 | ) | — | (544 | ) | — | ||||||||||
Income tax (expense) benefit |
(952 | ) | 5,355 | (2,594 | ) | 7,021 | ||||||||||
Income (loss) from continuing operations |
$ | 11,779 | $ | 1,021 | $ | 12,507 | $ | (37,376 | ) | |||||||
Consolidated Adjusted EBITDA margin (c) |
23.2 | % | 21.4 | % | 21.9 | % | 20.6 | % | ||||||||
Income from continuing operations margin |
4.0 | % | 0.4 | % | 1.4 | % | (4.7 | %) | ||||||||
| (a) | St. Louis includes operating results at Lumière Place and River City Casino. |
|
| (b) | River Downs was acquired on January 28, 2011. |
|
| (c) | See discussion of Non-GAAP Financial Measures above for a detailed description of
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA margin. |
Pinnacle Entertainment, Inc.
Supplemental Information
Income (Loss) from Discontinued Operations, Net of Income Taxes
(In thousands, unaudited)
Supplemental Information
Income (Loss) from Discontinued Operations, Net of Income Taxes
(In thousands, unaudited)
| For the three months | For the nine months | |||||||||||||||
| ended September 30, | ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Atlantic City |
$ | (1,429 | ) | $ | (1,670 | ) | $ | (26,818 | ) | $ | (8,656 | ) | ||||
Reno |
(11,482 | ) | 563 | (13,215 | ) | (1,199 | ) | |||||||||
President Riverboat Casino |
53 | (732 | ) | (460 | ) | (6,146 | ) | |||||||||
Casino Magic Argentina |
— | — | 287 | 3,363 | ||||||||||||
The Casino at Emerald Bay in The Bahamas |
— | (757 | ) | 73 | (745 | ) | ||||||||||
Casino Magic Biloxi |
100 | 1,151 | (87 | ) | 41,986 | |||||||||||
Income taxes |
189 | (342 | ) | 206 | (4,564 | ) | ||||||||||
Income (loss) from discontinued
operations, net of income taxes |
$ | (12,569 | ) | $ | (1,787 | ) | $ | (40,014 | ) | $ | 24,039 | |||||
Pinnacle Entertainment, Inc.
Supplemental Information
Reconciliations of GAAP Net Loss to Adjusted Net Income (Loss)
and GAAP Net Loss Per Share to Adjusted Earnings (Loss) Per Share
(In thousands, except per share amounts, unaudited)
Supplemental Information
Reconciliations of GAAP Net Loss to Adjusted Net Income (Loss)
and GAAP Net Loss Per Share to Adjusted Earnings (Loss) Per Share
(In thousands, except per share amounts, unaudited)
| For the three | For the nine | |||||||||||||||
| months | months | |||||||||||||||
| ended September | ended September | |||||||||||||||
| 30, | 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
GAAP net income (loss) |
$ | (790 | ) | $ | (766 | ) | $ | (27,507 | ) | $ | (13,337 | ) | ||||
Pre-opening and development costs |
2,465 | 1,201 | 7,175 | 12,171 | ||||||||||||
Impairment of indefinite-lived intangible assets |
— | — | — | 11,500 | ||||||||||||
Impairment of land and construction costs |
— | 4,773 | — | 23,164 | ||||||||||||
Write-downs, reserves and recoveries, net |
1,310 | 345 | 7,930 | (4,048 | ) | |||||||||||
Loss on early extinguishment of debt |
183 | — | 183 | 1,852 | ||||||||||||
Adjustment for taxes on above |
(1,593 | ) | (2,543 | ) | (6,153 | ) | (17,967 | ) | ||||||||
(Income) loss from discontinued operations, net
of income taxes |
12,569 | 1,787 | 40,014 | (24,039 | ) | |||||||||||
Adjusted net income (loss) (a) |
$ | 14,144 | 4,797 | $ | 21,642 | $ | (10,704 | ) | ||||||||
GAAP net income (loss) per share |
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.45 | ) | $ | (0.22 | ) | ||||
Pre-opening and development costs |
0.04 | 0.02 | 0.12 | 0.20 | ||||||||||||
Impairment of indefinite-lived intangible assets |
— | — | — | 0.19 | ||||||||||||
Impairment of land and construction costs |
— | 0.08 | — | 0.38 | ||||||||||||
Write-downs, reserves and recoveries, net |
0.02 | 0.00 | 0.13 | (0.06 | ) | |||||||||||
Loss on early extinguishment of debt |
0.00 | — | 0.00 | 0.03 | ||||||||||||
Adjustment for taxes on above |
(0.02 | ) | (0.04 | ) | (0.10 | ) | (0.30 | ) | ||||||||
(Income) loss from discontinued operations, net
of income taxes |
0.20 | 0.03 | 0.65 | (0.40 | ) | |||||||||||
Adjusted earnings (loss) per share (a) |
$ | 0.23 | $ | 0.08 | $ | 0.35 | $ | (0.18 | ) | |||||||
Number of shares — diluted |
62,059 | 61,128 | 61,940 | 60,654 | ||||||||||||
| (a) | See discussion of Non-GAAP Financial Measures above for detailed descriptions of
Adjusted net income and Adjusted income per share. |
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