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01/11 04:07
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows mixed signals: strong performance in specific casinos and regions, but weaknesses in others like Poland. Positive elements include record EBITDAR in some areas and strategic partnerships, while negatives involve vague management responses and challenges in Poland. The Q&A highlights cautious optimism but also uncertainty, particularly regarding consumer trends and capital allocation. Considering these factors and the market cap's unavailability, the stock price is likely to remain neutral in the short term.
Net Operating Revenue $154 million, driven by strength in the East and Midwest regions as well as in Canada, offset by weakness in the West region and in Poland.
EBITDAR (July) Up 7% year-over-year.
EBITDAR (August) Up 22% year-over-year.
EBITDAR (September) Sharp year-over-year decline due to onetime effects including a $1 million breakup fee from Tipico in the prior year, a $0.5 million bonus accrual reversal in the prior year, and extra costs in Poland without revenue from a closed casino.
Q3 EBITDAR (Adjusted) Would have increased by about 5% year-over-year, beating consensus estimates.
High Value Customer Growth 8% growth year-over-year, offsetting a 9% decline in lower-end segments.
Total Rated GGR Essentially flat year-over-year.
Retail Play Increased by 4%, resulting in a 2% GGR increase across the U.S. portfolio.
Visitation Statistics Visits by high value and core customers increased 4%, while visits from low segment players declined.
Century Casino and Hotel Caruthersville Gaming Revenue 29% higher year-over-year, with High Value up 82%, core up 29%, and retail up 22%. EBITDA increased 35% to $6.1 million from $4.5 million.
Century Casino and Hotel Cape Girardeau EBITDA $6.1 million, slightly below last year's record quarter.
Cripple Creek EBITDA $1.8 million, flat year-over-year.
Central City EBITDAR $1.2 million, up 20% year-over-year on a comparable basis, as last year's $2 million included a $1 million onetime payment from Tipico.
Mountaineer EBITDAR $4.4 million, flat year-over-year. Apples-to-apples, EBITDAR was up $0.5 million as last year's EBITDAR was inflated by a $0.5 million bonus accrual reversal.
Rocky Gap EBITDAR Increased 7% to $4.9 million year-over-year.
Nugget Casino Resort EBITDAR (August) Record $4.1 million, the highest single month result in nearly 3 years.
Alberta EBITDA Up 11.1% to $5.4 million year-over-year.
Poland EBITDAR Negative $0.5 million this quarter compared to $1.3 million last year, due to the closure of the Wrocław Hilton Casino.
Cash and Cash Equivalents $78 million at the end of the quarter compared to $85 million at the end of Q2, reflecting $5 million in CapEx, $1.5 million in share buybacks, $2.5 million in table games license fees in West Virginia, and $1 million in closing costs in Poland.
Total Principal Amount of Debt Outstanding $339 million, resulting in net debt of $261 million.
New land-based facilities in Colorado Springs: Reaching new markets with significant increase in customers from 75+ miles away. Modern and efficient facilities well-received by guests.
Sports betting launch in Missouri: Partnership with BetMGM to open a branded sportsbook and launch an online sportsbook, creating new revenue streams.
Electronic table lounges in Colorado properties: Replaced live table games, generating similar revenue at significantly lower costs.
Expansion in Colorado Springs: New land-based facilities attracting customers from farther distances, indicating market expansion.
Poland operations divestment: Committed to divesting Poland operations, with updates on the process expected in the coming months. Committed to divesting operations in Poland to focus on stable and profitable markets.
Convention space expansion at Nugget Casino Resort: Converting unused space into 11,000 sq. ft. of convention space, increasing capacity by 10%.
Customer segmentation performance: High-value and core customer segments grew by 8%, offsetting a 9% decline in lower-end segments. Retail play increased by 4%.
Cost management in Alberta: Disciplined cost management led to EBITDA growth of 11.1%.
Electronic table lounges: Implemented in Colorado properties, reducing costs while maintaining revenue.
Strategic review process: Comprehensive review underway, with no decisions yet made. Updates expected by Q1 next year.
Weakness in the West region and Poland: The company experienced a decline in performance in the West region and Poland, with Poland facing extra costs and no revenue from a closed casino. This contributed to a sharp year-over-year decline in September EBITDAR.
Decline in low-end customer segments: While high-value and core customer segments showed growth, the low-end customer segment declined by 9%, impacting total rated GGR and visitation statistics.
Challenges in Poland operations: Poland operations faced headwinds due to license delays, relocations, and the closure of the Wrocław Hilton Casino, which negatively impacted EBITDA. The company is committed to divesting its Poland operations.
Retail play decline in Colorado: Retail play in Colorado declined, particularly at Cripple Creek and Central City, affecting total gaming revenue.
Weaker performance at Nugget Casino Resort: Despite a record EBITDAR in August, the Nugget Casino Resort faced weaker performance in July and September, offsetting gains.
Restatement of financial statements: The company discovered an error during impairment testing for goodwill, requiring restatement of financial statements for 2024 and the first two quarters of this year. This could impact investor confidence.
High net debt-to-EBITDA ratio: The company's net debt-to-EBITDA ratio stands at 6.9x, with a lease-adjusted ratio of 7.6x, indicating significant leverage.
Economic uncertainty: The company acknowledges the level of economic uncertainty, which could impact its long-term prospects and customer behavior.
Poland Operations: No license expirations for at least 3 years, ensuring normalized EBITDAR run rate for many quarters. Commitment to divest Poland operations with updates on the divestment process in the coming months.
Missouri Sports Betting: Sports betting launches in Missouri on December 1 in partnership with BetMGM. A BetMGM branded sportsbook will open on property, and BetMGM will launch its online sportsbook. Expected to elevate Cape Girardeau's profile and create new revenue streams.
Nugget Casino Resort Expansion: Converting unused space into an additional 11,000 square feet of convention space, a 10% increase, to be completed by year-end. The space will host a major group event in January 2026.
Poland Casino Operations: Relocated Wrocław Casino ramping up well, with a second Wrocław location opening in January 2026. All current licenses valid through 2028, ensuring stable operations.
Future Financial Prospects: Confident in higher EBITDAR and cash flow for 2026 and beyond. Positive customer trends continued into October, with preliminary results showing EBITDAR up over 20% compared to last year. Core customers expected to benefit from new tax deductions passed by Congress.
Share Buyback Program: The company spent $1.5 million on the share buyback program during the quarter.
The earnings call shows mixed signals: strong performance in specific casinos and regions, but weaknesses in others like Poland. Positive elements include record EBITDAR in some areas and strategic partnerships, while negatives involve vague management responses and challenges in Poland. The Q&A highlights cautious optimism but also uncertainty, particularly regarding consumer trends and capital allocation. Considering these factors and the market cap's unavailability, the stock price is likely to remain neutral in the short term.
The earnings call indicates strong financial performance in several areas, including impressive growth in Poland and improvements in cash flow and debt ratio. The strategic plan highlights new partnerships and operational efficiencies, with an optimistic outlook on upcoming quarters. The Q&A reveals positive sentiment from analysts, with explanations for lower stock repurchases and strategic responses to market trends. The company's share buyback plan and positive EBITDAR growth further support a positive sentiment, likely leading to a stock price increase of 2% to 8%.
The earnings call highlights strong financial performance in Missouri, with significant revenue growth and improved EBITDAR margins. The company is focused on operational efficiency and expects improved cash flow and EBITDAR in 2025. Despite some uncertainty in guidance and vague responses on Polish asset divestment, the overall sentiment is positive due to strong revenue growth, successful new casino openings, and a proactive market strategy. The Q&A section did not reveal significant negative trends. Therefore, the stock price is likely to experience a positive movement in the short term.
The earnings call indicates several positive factors: a successful new casino opening with strong revenue growth, a focus on operational efficiency, and a solid shareholder return plan via stock buybacks. Despite some year-over-year declines in EBITDAR and visitor volume, the company's strategic initiatives and optimistic outlook, particularly in Missouri, suggest potential for growth. The Q&A revealed management's proactive revenue strategies and continued cost optimization efforts, though some uncertainty remains regarding the Polish asset divestment. Overall, the positives outweigh the negatives, suggesting a positive stock price movement.
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