MTR Gaming Group Inc. (MNTG) CEO Ted Arneault was looking forward to future growth as he released the second quarter fiscal results for his company.
Higher interest payments were blamed for the company’s net income decline of 10% with the total $3.5 million or $0.12 per diluted share failing to match last year’s $3.9 million profit or $0.13 a share.
However, revenue for the period increased to $75.5 million from last year’s $67.1 million.
The future was where Arneault was focusing while telling investors that "I think we’ve made remarkable strides."
The company recently completed the purchase of Scioto Downs, a harness racing facility near Columbus, Ohio, for $19 million; planned to spend $56 million to build a harness racing track in Erie, Pa., although the company’s license, that already has survived one court challenge, now faces another, and the hope of building a $100 million thoroughbred track in Harmar Township, Pa., about 11 miles from Downtown Pittsburgh.
Arneault cited the company’s success at running a thoroughbred operation with slot machines at its Mountaineer Park as giving it an edge in the bidding for the thoroughbred racing license.
"I truly believe that with our experience in the thoroughbred racing area and operating a slot machine facility to help with economic development, we have the strongest application for the (Pittsburgh) license.
Still awaited is action by the Pennsylvania lawmakers relative to authorizing the state’s racetracks to install video lottery machines. MTR Gaming has indicated it will go forward with the Erie facility regardless of whether slots are permitted. The thoroughbred license, however, will be contingent of expanding gaming.
Las Vegas Sands
The Venetian Casino Resort and the Grand Canal Shops, owned by Las Vegas Sands, Inc., a privately held company controlled by Sheldon Adelson, reported record results for the period that ended on June 30.
Net revenues were $150.4 million, an increase of 17.3% from net revenues of $128.2 million the second quarter of 2002. Net income for the period rose to $15.9 million. Last year, the company reported a loss of $44.2 million during the second quarter.
Adjusted property EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) jumped to $61.5 million, a 37% increase over last year’s $44.9 million.
In remarking on the quarter’s experience, Bill Weidner, president and COO, said "We believe that our room, casino, food and beverage, and retail business, along with increased mall traffic and the enhanced mall tenants sales, all positively contributed to the overall strength of the Venetian."
Going forward, he said, the opening of the "Venezia" hotel tower, adding 1,013 luxury all-suite rooms "will further enhance the property." Also beefing up the property was the opening of the Venetian Congress Center that adds 150,000 square feet to its exposition area. The addition also includes three ballrooms, 64 meeting rooms and three permanent boardrooms.
Under construction, he said, was the Sands Macao, the company’s first casino in the Chinese enclave, which is expected to open during the first quarter of 2004.
Record quarterly revenues, net earnings and earnings per share were reported by Churchill Downs Inc. (CHDN) for the June 30 period.
Net revenues amounted to $180.5 million, an increase of 4.6% over the $172.6 recorded during the comparable quarter of 2002. Net earnings for the quarter were $28 million that topped last year’s $23.1 million by 21%. Diluted share earnings reached $2.09, while last year, the per-share earnings were $1.73.
In explaining the increases, Tom Meeker, president and CEO, said the company benefited from record wagering on the Kentucky Derby and Oaks, its two signature races, and a shift in racing dates from the fourth quarter to the second. Also, he said, the company saw strong growth in its simulcast network and had an additional 19 racing dates at Arlington Park.
However, he was not optimistic about revenues and earnings for the next two quarters.
"Some of the elements that contributed to our strong second quarter will work against us in the third quarter and remainder of the year. Instead of enjoying incremental revenues from our Master Plan expansion as we did in the second quarter, we will conversely incur expenses associated with the demolition phase of construction," he warned.
Although revenues were relatively flat for the period, Mikohn Gaming Corporation (MIKN) reported a smaller net loss for the second quarter ended on June 30 that it did a year earlier.
Second quarter revenues were $23.5 million, down slightly from last year’s $24 million, but the net loss was $2.4 million or $0.18 a share. In 2002, the net loss was $5.8 million or $0.45 a share.
Revenues from gaming operations amounted to $9.8 million, down $1 million from the comparable period. This, the company said, was due to the delay in new game approvals in Mississippi and Ontario. During the period, the company averaged 2,062 branded slot machines in casinos, compared to last year’s 2,427 branded machines.
Gaming products revenues moved up to $13.7 million in 2003, a half-million dollars better that in 2002.
"We are pleased with the progress we have made thus far, as we continue our transition to a leading provider of game content," said Russ McMekkin, president and CEO. "We are committed to continue to improve our performance. Our joint partnership agreement with DP Stud will result in exciting new table games, the first of which will be unveiled at this year Global Gaming Expo."
Net earnings for the second fiscal quarter for Lakes Entertainment Inc. (LACO) were $800,000 or diluted per share earnings of $0.07. This compared with the net loss of $7.2 million or $0.67 per share in the quarter that ended on June 30, 2002.
Lyle Berman, chairman and CEO, reported that the revenues were derived from license fees related to the 2003 World Poker Tour series that has completed its first year. The series was telecast on the Travel Channel. Also, Berman announced that the company has successfully negotiated another contract with the Travel Channel giving it exclusive rights to telecast the poker tour.
Since the first season has ended, he said, there will be no additional revenues expected from the poker tour. All rights payments for the second season will be recognized in the 2004 fiscal reports.
"We are pleased with the popularity of the first season of the World Poker Tour series," Berman remarked.
Although the company does not have an operating casino, it does have contracts with four different Indian tribes who are working toward receiving state and federal approval for casino operations.