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01/11 15:17
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance, with revenue and EBITDA growth, particularly at American Place and Chamonix. The Q&A reveals optimistic market potential and plans for operational improvements. Despite some uncertainties, such as financing timelines and regulatory hurdles, management's focus on growth and efficiency suggests a positive outlook. The company's strategy to increase gaming per capita and explore financing options further supports a positive sentiment, likely leading to a stock price increase.
Revenue Revenues rose to $78 million from $75.7 million in last year's third quarter, representing a 5% growth on an apples-to-apples basis after excluding $1.5 million of revenue from Stockman's, which was sold in April of this year.
Adjusted EBITDA Adjusted EBITDA rose 26% to $14.8 million. This figure would have been closer to $15.2 million, except for several unusual items. Growth was driven by American Place in Illinois and Chamonix in Colorado, both in their ramp-up phases.
American Place Revenue Revenues at American Place increased by 14% to $32 million in the third quarter. Adjusted property EBITDA rose 16% to $9 million, driven by a growing customer database and increased awareness.
Chamonix Revenue Revenues at Chamonix rose by more than 7%. Adjusted property EBITDA increased by $2.8 million, from negative $0.7 million last year to positive $2.1 million. Table game revenues were up 53% year-over-year, and slot revenues increased by 6%.
Chamonix Efficiency The average number of FTEs was reduced from 373 in the first quarter to 325 in the third quarter, a 13% reduction, improving operational efficiency.
Liquidity The company had about $40 million of liquidity at the end of the quarter, with minimal CapEx expected until construction begins on the permanent American Place Casino.
Temporary American Place Casino: Achieved record revenue and profitability with a 14% increase in revenue to $32 million and a 16% rise in adjusted property EBITDA to $9 million. Database grew to over 115,000 people, with continued strong sign-ups.
Permanent American Place Casino: Received unanimous site approval from Waukegan City Council. Project budget reduced from $325 million to $302 million. Plans include doubling square footage, increasing slots by 40%, and table games by 90%.
Chamonix Casino: Revenues rose by over 7%, and adjusted property EBITDA increased by $2.8 million to $2.1 million. Table game revenues grew 53%, and slot revenues increased by 6%. Database is growing by about 3,000 new customers monthly.
American Place Casino Market Position: Located in a wealthy and densely populated area of Lake County, Illinois, with minimal competition. The casino targets local markets rather than Wisconsin, ensuring a strong competitive position.
Chamonix Casino Market Expansion: Attracting guests from Denver (30% of visitors) and Texas, in addition to the Colorado Springs area. Douglas County in South Denver, a wealthy and growing area, is a significant contributor to the market.
Operational Efficiency at Chamonix: Reduced full-time employees by 13% from Q1 to Q3 2025, despite the busier summer season. Targeting further efficiency improvements for the winter season.
Group Business Strategy at Chamonix: Targeting 25 group events in 2026, with plans to grow to 55 events annually within three years. Focused on conferences with 100-150 attendees, leveraging the property’s ballroom and amenities.
Potential competition from Kenosha casino: There is a potential for a new casino in Kenosha, Wisconsin, which could pose a competitive threat. However, this project faces significant hurdles, including federal and state approvals, legal challenges, and years of development before it could open.
Renovation disruption at Grand Lodge: Renovation activities at the Hyatt Lake Tahoe, which houses the Grand Lodge casino, have negatively impacted operations and revenues at this property.
Underpenetrated Colorado Springs market: The Colorado Springs market remains underpenetrated, with only 12%-15% of residents visiting casinos in Cripple Creek. This represents a challenge in fully capturing the market potential.
Dependence on Illinois operations for debt servicing: The company relies heavily on its Illinois operations to cover interest expenses on its current debt, which could pose a risk if these operations underperform.
Economic uncertainties affecting group business: The group business at Chamonix is still in its early stages, and economic uncertainties could impact the ability to attract and retain group events.
Temporary American Place Casino: The temporary American Place Casino is expected to achieve $50 million of run rate EBITDA, with the larger permanent facility projected to earn double that amount ($100 million).
Permanent American Place Casino: The project has received unanimous site approval from the Waukegan City Council. The budget has been reduced from $325 million to $302 million (excluding capitalized interest). The facility will have more than double the square footage, a 40% increase in slots, and a 90% increase in table games. It is expected to generate a high ROI due to its location in a wealthy and densely populated area.
Chamonix Casino: The property is expected to grow its group business to 55 events per year over the next three years. The underpenetrated Colorado Springs market and increasing guests from Denver and Texas are seen as significant growth opportunities. The management expects the property to double its unique guest count from 51,000 in the last year.
Group Business at Chamonix: The property is targeting 25 events of 100-150 attendees next year, with plans to grow to 55 events annually within three years.
Cost Efficiency at Chamonix: The property has reduced FTEs by 13% and expects further efficiency improvements in the upcoming winter season.
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The earnings call reflects strong financial performance, with revenue and EBITDA growth, particularly at American Place and Chamonix. The Q&A reveals optimistic market potential and plans for operational improvements. Despite some uncertainties, such as financing timelines and regulatory hurdles, management's focus on growth and efficiency suggests a positive outlook. The company's strategy to increase gaming per capita and explore financing options further supports a positive sentiment, likely leading to a stock price increase.
The earnings call reveals mixed signals: American Place shows revenue and EBITDA growth, but Chamonix is flat with cost synergies. Silver Slipper faces revenue decline, and external factors impact Grand Lodge Casino. The Q&A highlights cost-saving measures and new marketing strategies, but regulatory and construction delays pose risks. Overall, the company's stable financial performance and optimistic management tone are offset by uncertainties, leading to a neutral sentiment.
The earnings call reveals several negative indicators: an EPS miss, legal and competitive challenges, and economic pressures. Despite revenue growth in some areas, the lack of a share repurchase program and unclear CapEx plans add uncertainty. While management is optimistic about future projects, current financial instability and rising competition create a negative outlook. The market is likely to react negatively due to these factors, despite some positive revenue growth in specific areas.
The earnings call presents a mixed picture: strong year-over-year revenue growth and EBDIT improvements suggest positive financial performance, but competitive pressures, supply chain challenges, and legislative risks present concerns. The Q&A highlights management's cautious approach to financing and operational improvements, yet reveals uncertainties in material costs and CapEx plans. The decision to avoid equity issuance and focus on debt for financing is prudent but risky in volatile markets. Overall, the sentiment is neutral, with positive financial metrics balanced by potential risks and uncertainties.
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