EX-99 3 pressrelease.htm PR 11/05/01 SIHL ANNOUNCES 2001 3RD QTR EARNINGS Sun International Press Release 11/05/01 2001 3rd Quarter Earnings

Exhibit 99

FROM:

Sun International

 

The Bahamas

 

Contact: John Allison

 

Tel: 1.242.363.6016

FOR IMMEDIATE RELEASE


SUN INTERNATIONAL ANNOUNCES 2001 THIRD QUARTER EARNINGS

PARADISE ISLAND, The Bahamas, November 5, 2001 – Sun International Hotels Limited (NYSE: SIH) reported a net loss for the quarter of $7.5 million, before pre-opening expenses, real estate sales, restructuring and refinancing costs, compared to recurring earnings of $9.2 million in the same period last year. The loss per share for the period, excluding the above items, was $0.28, compared to recurring earnings per share (pro forma for the sale of Resorts Atlantic City) of $0.10 for the same period last year.

Including the non-recurring items referred to above, the Company recorded a loss in the quarter of $11.7 million, compared to net income of $12.4 million for the same period last year.

The reduction in profitability was primarily due to the dramatic effects on occupancies at Atlantis, Paradise Island, in September after September 11.

Paradise Island

The Company’s Paradise Island operations generated EBITDA of $14.3 million, a 38% decline compared to the $23.2 million that was achieved during the same period last year. The Paradise Island businesses performed very well during July and August. Atlantis achieved an average occupancy of 92% for these two months and an increase of 25% in EBITDA over the same period last year.

In September, which is traditionally slower after Labor Day in the United States, Atlantis’ average occupancy was 35%, compared to 68% in the same month last year. Based on the significant reduction in business volumes in September, following September 11, a series of actions were taken at the property in order to reduce operating costs. Daily call volumes received by the Company’s in-house tour operator, which fell by more than 70% following September 11, have improved quite significantly, although remain below year ago levels.

Results at the Ocean Club were similarly affected by the events of September 11, with the property achieving an occupancy of 57% for the quarter compared to 78% for the same period last year.

Connecticut

The Mohegan Sun opened the first phase of its $960 million “Project Sunburst” expansion on September 25, 2001, which was one week ahead of schedule. The new “Casino of the Sky” adds over 80 additional table games, over 2,500 new slot machines, the “Shops at Mohegan Sun”, a 10,000-seat events center, and further restaurant facilities. The final phase of the project will also feature a 1,200-room luxury hotel and a 100,000-square foot convention center, which are both expected to open in April 2002.

The Mohegan Sun Casino recorded growth of 7% in gross operating revenues over the same period last year, as gross revenues for the quarter were $233.3 million compared to $218.2 million in the same period last year. The gross win per slot machine per day for the quarter was $456, versus $535 for the same period last year, when neither the “Casino of the Sky” nor the “Hall of the Lost Tribes” smoke-free slot room had been opened, which together added over 3,100 new slot machines to the casino floor.

Trading Cove Associates, an entity 50%-owned by the Company, receives payments of 5% of gross revenues of the expanded Mohegan Sun operation. The Company’s share of Trading Cove Associate’s net income from Mohegan Sun was $7.1 million for the quarter compared to $5.0 million in the prior year.

Other Resort Operations

The Company manages seven luxury resort hotels in the Indian Ocean and Dubai. During the quarter, these properties were impacted by economic weakness in their European source markets and by the September 11 events. The Company earned management fees of $1.0 million from these other resort operations in the quarter, compared to $1.3 million in the comparable quarter last year.

Internet Gaming

The Company’s Internet gaming subsidiary was successful in obtaining one of three licenses awarded by the Government of the Isle of Man, one of the most credible jurisdictions to regulate Internet gaming, despite stiff competition from many major land-based casino operators.

The Company’s Internet gaming test site, www.AmbassadorCasino.com which went live early in July 2001 in a test mode, is designed to exclude play from countries where Internet gaming is unlawful, including the United States, and to prevent under-age access to the site. The Company will monitor the progress of the site with the intention of launching a fully-fledged operation later this year. The costs related to the test site have been expensed as pre-opening expenses.

Financing

In August, the Company successfully issued $200 million of 8-7/8% Senior Subordinated Notes due 2011. The proceeds were used to repay a portion of the loans outstanding under the Company’s revolving credit facility.

Sun International Hotels Limited is a leading developer and operator of premier casinos, resorts and luxury hotels. Our flagship destination is Atlantis, a 2,317-room, ocean-themed resort located on Paradise Island, The Bahamas. Atlantis is a unique destination casino resort featuring three interconnected hotel towers built around a 7-acre lagoon and a 34-acre marine environment that includes the world’s largest open-air aquarium. We also developed and receive certain revenue from the Mohegan Sun casino in Uncasville, Connecticut. The Native American-themed Mohegan Sun is one of the premier casino gaming properties in the Northeast and one of the most profitable casinos in the United States. In our luxury resort hotel business, we operate eight beach resorts in Mauritius, Dubai, the Maldives and The Bahamas. For more information concerning Sun International Hotels Limited and its operating subsidiaries, visit our website at www.sunint.com.

This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, which are described in the Company’s public filings with the Securities Exchange Commission.

Inquiries should be directed to John Allison, Executive Vice President – Chief Financial Officer of Sun International Hotels Limited at +1.242.363.6016.

(Condensed Consolidated Statements of Operations and Summary Segment Data are attached.)






Sun International Hotels Limited Condensed Consolidated Statements of Operations (In Thousands of Dollars Except Per Share Data) (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, ---------------------------- ----------------------------- 2001 2000 2001 2000 ------------- ------------- ------------- ------------- Revenues: Casino and resort revenues $ 99,453 $ 186,736 $ 387,399 $ 585,999 Less: promotional allowances (4,146) (11,721) (18,610) (40,466) ------------- ------------- ------------- -------------- 95,307 175,015 368,789 545,533 Tour operations 7,735 8,058 28,446 23,984 Management and other fees 8,460 8,031 26,783 24,701 Real estate related 2,014 9,413 9,771 105,504 Other 1,096 773 2,860 2,231 ------------- ------------- ------------- -------------- 114,612 201,290 436,649 701,953 ------------- ------------- ------------- -------------- Expenses: Casino and resort expenses 61,886 114,581 202,465 342,995 Tour operations 7,019 6,997 25,060 21,444 Selling, general and administrative 20,166 27,004 62,794 78,059 Real estate related 554 4,845 2,865 30,739 Corporate expenses 5,498 6,444 17,711 18,636 Depreciation and amortization 13,937 15,056 38,053 44,334 Write-off of Desert Inn costs - - - 11,202 Transactions costs - - - 7,014 Restructuring costs 1,200 - 1,200 - Pre-opening expenses 781 1,397 5,136 2,087 ------------- ------------- ------------- -------------- 111,041 176,324 355,284 556,510 ------------- ------------- ------------- -------------- Operating income 3,571 24,966 81,365 145,443 Other income and expenses: Interest income 1,875 826 6,145 2,798 Interest expense, net of capitalization (11,195) (10,361) (38,031) (33,681) Non-recurring interest expense (3,355) - (3,355) - Equity in earnings (loss) of associated companies (638) 753 2,166 1,767 Other, net (390) (707) (450) (707) ------------- ------------- ------------- -------------- Income (loss) before income taxes (10,132) 15,477 47,840 115,620 Provision for income taxes (1,612) (3,103) (4,566) (5,436) ------------- ------------- ------------- -------------- Net income (loss) $ (11,744) $ 12,374 $ 43,274 $ 110,184 ============= ============= ============= ============== Diluted earnings (loss) per share $ (0.44) $ 0.42 $ 1.55 $ 3.45 Weighted average number of shares outstanding (1) 26,765 29,664 27,836 31,957 (1) Includes the effect of outstanding stock options.





Sun International Hotels Limited Summary Segment Data (In Millions) (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, --------------------------- ----------------------- 2001 2000 2001 2000 ------------- ------------ ---------- ----------- Paradise Island Operations Gross revenues (1) $ 99.5 $ 104.3 $ 387.4 $ 366.9 Casino 23.0 26.8 96.8 101.4 Hotel (2) 76.5 77.5 290.6 265.5 EBITDA (3) $ 14.3 $ 23.2 $ 107.6 $ 107.4 Atlantis Occupancy rate 74% 84% 84% 87% Average room rate $ 224 $ 211 $ 258 $ 246 Resorts Casino Hotel Gross revenues $ - $ 82.4 $ - $ 219.1 Casino - 69.1 - 182.6 Hotel - 13.3 - 36.5 EBITDA $ - $ 11.5 $ - $ 20.7 (1) The three month period presented for 2001 and 2000 excludes revenues from Ocean Club Estates lot sales of $2.0 million and $9.4 million, respectively. The nine month period presented for 2001 and 2000 excludes revenues from Ocean Club Estates lot sales of $9.8 million and $105.5 million, respectively. (2) Excludes results of the Company's wholly owned tour operator. (3) The three month period presented for 2001 and 2000 excludes a gain from Ocean Club Estates lot sales of $1.5 million and $4.6 million , respectively, excludes pre-opening expenses of $-0- and $1.5 million, respectively, and excludes restructuring costs of $1.2 million and $-0-, respectively. The nine month period of 2001 and 2000 excludes a gain from Ocean Club Estates lot sales of $6.9 million and $74.8 million, respectively, excludes pre-opening expenses of $1.6 million and $2.2 million, respectively, and excludes restructuring costs of $1.2 million and $-0-, respectively.