Increases in operating expenses, from higher employee health costs to jumps in legal, accounting and financial advisory fees, caused a dramatic drop in earnings for MTR Gaming Group Inc. (MNTG) for the fourth quarter of fiscal 2005.
The company reported consolidated net revenues of $82 million, an increase of 17% over the $69.9 million reported in the comparable quarter of a year earlier. However, net income was $41,000, or less than a penny per diluted share, down from last year’s profit of $2.5 million or $0.09 per share.
EBITDA, earnings before interest, taxes, depreciation and amortization, also declined, from the previous $12.3 million to $9.5 million.
For the full fiscal year, the company had net revenues of $349.9 million, up 13% over $309.9 million in 2004. Net income was $7.7 million or $0.27 per share compared to $14.4 million or $0.50 per diluted share.
Looking to boost revenues, especially at Binion’s Hotel/Casino in downtown Las Vegas, the company said it planned to launch new marketing initiates and is considering the addition of entertainment and other amenities to increase walk-in traffic from the Fremont Experience area.
As for future hopes, the company said it had projects in Michigan, Minnesota and Pennsylvania that it expected to get operating within the next two years.
While changing the company name to Progressive Gaming International Corporation (PGIC) from Mikohn Gaming, and resolving accounting issues involving the recording of licensing contracts, the company incurred a loss for both the fourth quarter and the fiscal year, according to an announcement made Monday.
The company said revenues for the period declined from $21.7 million to $19.2 million "primarily due to the $4.2 million of revenue from the two licensing contracts that were recorded as deferred revenue."
Also included in the fourth quarter report was a one-time charge resulting from the early retirement of a portion of the high yield debt. This resulted in a net loss of $6.8 million or $0.22 per share
The net loss for the quarter amounted to $3.9 million or $0.13 per share compared to net income of $1.8 million or $0.08 per share in the final quarter of 2004.
For the year, the revenues were $73 million, down from $96.4 million in the previous year with a net loss of $3 million or $0.12 per share compared to the net loss of $2.6 million or $0.12 per share in 2004.