MTR Gaming Group Announces Second Quarter Results.CHESTER, W.Va. -- MTR Gaming Group MTR Gaming Group Inc. NASDAQ: MNTG is a hospitality company based in Chester, West Virginia. The company holds, mostly through several subsidiaries, hotels, casinos and sports facilities. , Inc. (NasdaqGS:MNTG) today announced financial results for the second quarter and six months ended June 30, 2006. See attached tables (including Reconciliation of Non-GAAP Measures to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Revenues, net of promotional allowances, for the second quarter were $94.9 million compared to $95.4 million in the second quarter of 2005. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was $11.2 million compared to $12.1 million in the same period of 2005. The decrease in EBITDA is attributable in large part to Binion's operating results as discussed below. Net income was $472,000 or $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share versus $1.6 million or $0.06 per diluted share in the second quarter of the prior year. The decrease in net income reflects the EBITDA decline as well as higher net interest expense associated with the issuance of $125 million of Senior Subordinated Notes in May 2006 and an increase in the Company's effective income tax rate. Operating performance at the Company's flagship property, The Mountaineer Racetrack & Gaming Resort, was strong despite a decrease in net revenues. The property generated EBITDA of $15.5 million, a 6% increase from $14.6 million in the second quarter of last year, reflecting Mountaineer's cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts. However, net revenues at Mountaineer decreased to $74.0 million, compared to $76.5 million in the second quarter of 2005, due to general economic conditions including increased fuel costs. In July, the West Virginia Lottery The West Virginia Lottery is run by the state government. It is a member of the Multi-State Lottery Association (MUSL). It offers games such as Powerball, Hot Lotto, and numerous scratch tickets. It also runs video lottery, including the MUSL-sponsored Cashola. began participating in the new multi-state progressive "Ca$hola" game. Currently, Mountaineer has 25 slots dedicated to this new game. The Company believes growth of this game, which has already yielded an annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. jackpot in excess of $700,000 for a player in Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. , will further differentiate Mountaineer's slot offering from its competition. Binion's accounted for $15.1 million of net revenues in the second quarter, a 4% increase from the second quarter of 2005. However, Binion's experienced an EBITDA loss of $523,000, versus an EBITDA contribution of $770,000 in the comparable 2005 period, primarily due to higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the second quarter of 2006 compared to the same period a year ago. Additionally, the quarterly comparison was impacted by favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustments to expenses associated with reductions in the player point liability in the second quarter of 2005 that did not occur in the 2006 quarter. The Company continues to focus on realigning operations in order to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the facility's excellent position within the Downtown Las Vegas Downtown Las Vegas can have several meanings depending on how it is used. It can mean:
1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. in North Las Vegas, Nevada North Las Vegas is a city in Clark County, Nevada, United States. As of the 2000 census, the city had a total population of 115,488, with a Census Bureau estimate of 197,567 as of 2006, and a Clark County estimate of 202,520 as of July 1, 2006 [2]. accounted for net revenues of $3.0 million and an EBITDA contribution of $568,000 for the quarter. During the second quarter, land options associated with the site of the Company's proposed stand-alone casino in Pittsburgh expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. . Accordingly, related costs of approximately $268,000 were expensed. For the first half of 2006, revenues, net of promotional allowances, rose 9% to $187.9 million from $171.9 million in the first six months of 2005. EBITDA was $25.8 million versus $25.6 million in the same period last year. Net income was $3.8 million or $0.14 per diluted share compared to $4.5 million or $0.15 per diluted share in the first half of 2005. MTR MTR Motor MTR Meter MTR Mass Transit Railway MTR Mountaintop Removal (coal mining method) MTR Mid-Term Review MTR Mortar MTR Museum of Television and Radio MTR Magnetization Transfer Ratio noted that the Company's operating performance continues to reflect the carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. of the developments on which it is working, which are highlighted below and which management believes will further diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. MTR. Presque Isle Downs Presque Isle Downs & Casino is a casino and thoroughbred racetrack complex in Erie, Pennsylvania. The owner, MTR Gaming Group, broke ground in October 2005 for its new racino, which opened on February 28, 2007. It contains 2,000 slot machines. Construction of Presque Isle Downs, which began with earthwork earth·work n. 1. An earthen embankment, especially one used as a fortification. See Synonyms at bulwark. 2. Engineering Excavation and embankment of earth. 3. in October of 2005, continues according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. schedule. Erection erection /erec·tion/ (e-rek´shun) the condition of being rigid and elevated, as erectile tissue when filled with blood. e·rec·tion n. 1. of steel for the Clubhouse has begun. Contractors are currently paving parking lots and internal roadways. The Company continues to project substantial completion of the Clubhouse, including a 48,074 square foot gaming area that can accommodate up to 2,000 slot machines, a buffet A buffet is a meal serving system where patrons serve themselves. It is a popular method of feeding large numbers of people with minimal staff. The term is also used to describe a sideboard, an antique form of furniture which was sometimes used to offer the dishes of a buffet meal , and gourmet room in November of 2006 and the racetrack and supporting facilities by October of 2007. On July 27, 2006, the Pennsylvania Gaming Control Board The Pennsylvania Gaming Control Board is a Pennsylvania state governmental agency that was founded in 2004 as the state licensing and regulatory agency responsible for overseeing the slots casino industry. announced a new schedule for License Hearings for all applicants. Presque Isle Presque Isle (prĕsk īl) [Fr.,=peninsula], city (1990 pop. 10,550), Aroostook co., NE Maine, inc. 1859. It is the trade, tourist, and shipping center of the Aroostook valley. Downs' public hearings for its Conditional Category 1 Slot Machine License and Permanent Slot Machine License will be held September 11, 2006 and December 4, 2006, respectively. The Control Board also announced that it expects to act on the Conditional Category 1 License applications in September, 2006 and the Permanent Category 1 License applications in December, 2006 (licensees may operate slot machines pursuant to the Conditional Category 1 License, pending issuance of the Permanent Category 1 License). Given the schedule changes, the Company plans to open the Clubhouse for slot machine gaming as soon as practicable practicable adj. when something can be done or performed. after the issuance of the Conditional Category 1 License and the state's readiness to commence slot operations. Also in July, 2006, the Pennsylvania Department of Revenue issued temporary regulations interpreting the state's gaming act to require Category 1 licensees to pay a minimum of $10 million annually to local government. In April of 2006, a Department spokesman had indicated that the aggregate amount payable to the host county and host municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. would be capped at 4% of gross terminal revenue (net win after payouts to players). The Company intends to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact of
this new regulation by pursuing agreements with Erie County Erie County is the name of several counties in the United States:
stipulatory noncontroversial, uncontroversial - not likely to arouse controversy on- and off-site infrastructure improvements. The Company remains confident, notwithstanding the new regulation, that the distribution scheme as a whole (including the creation of a Horse Racing horse racing, trials of speed involving two or more horses. It includes races among harnessed horses with one of two particular gaits, among saddled Thoroughbreds (or, less frequently, quarterhorses) on a flat track, or among saddled horses over a turf course with Development Fund into which all of the state's slot machine licensees will pay a portion of gross terminal revenue, but from which only the Category 1 licensees will receive distributions - 80% of which will supplement racing purses), will provide an acceptable return on the Company's investment. Scioto Downs Scioto Downs is a horse racing track located in a rural portion of Franklin County, Ohio, United States, south of Columbus. It is also the site of the OHSAA State Cross Country Championships, generally in late October or early November, in which case it is a moderately flat, fast On May 10, 2006, Ohio's Attorney General approved for circulation an April 29, 2006 Initiative Petition submitted by the Ohio Learn & Earn Committee calling for an amendment of the state's Constitution that would permit the operation of up to 3,500 slot machines at the state's seven commercial racetracks, including the Company's Scioto Downs, and two waterfront locations in Cleveland. In order to place the proposed amendment on the November 7, 2006 ballot, Learn & Earn must collect 322,899 signatures from registered voters spanning 44 counties. The amendment, if approved by the voters, sets forth the amounts payable to the state from gross terminal revenue as well as the distribution scheme. The amendment would dedicate ded·i·cate tr.v. ded·i·cat·ed, ded·i·cat·ing, ded·i·cates 1. To set apart for a deity or for religious purposes; consecrate. 2. 30% of gross terminal revenue to a scholarship and grant program for the state's public and private not-for-profit institutions of higher learning higher learning n. Education or academic accomplishment at the college or university level. . The amendment would likewise require the state's General Assembly to pass enabling legislation Noun 1. enabling legislation - legislation that gives appropriate officials the authority to implement or enforce the law legislation, statute law - law enacted by a legislative body within six months after its passage. The Company intends to support the efforts of the Ohio Learn & Earn Committee. Based upon the demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. of the Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. market (1.0 million, 1.6 million, and 4.9 million adults within 25, 50, and 100 miles of the property, respectively) and contemplated competition, the Company believes that, if the amendment were to pass, Scioto Downs could support approximately 3,000 slot machines. In a July 31, 2006 press release, the Learn & Earn Committee reported that it has obtained more than 600,000 signatures. The Company cannot predict, however, whether the Learn & Earn Committee will obtain the requisite signatures to place the amendment on the ballot, and, if it does obtain those signatures, whether the citizens of Ohio will vote in favor. Indeed, an individual has filed suit requesting class action certification and seeking a declaration that the Learn & Earn Committee and those soliciting signatures have violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. state law by "making misrepresentations and false communications relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Petition" and seeking injunctive relief injunctive relief n. a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. Learn & Earn from using any form of petition that does not include certain disclosures. The amendment has been endorsed by the Greater Cleveland Greater Cleveland is a nickname for the metropolitan area surrounding Cleveland in Ohio. Northeast Ohio refers to a similar but substantially larger area as described below. Partnership, the Ohio Association of Convention and Visitors Bureaus, the Ohio Licensed Beverage Association, and the three major horsemen's groups involved in Ohio horse racing and breeding. North Metro Harness Clears Legal Hurdles As previously reported, in January of 2005, the Minnesota Racing Commission granted North Metro Harness Initiative, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (50% owned by MTR) licenses to operate a harness racetrack with pari-mutuel wagering wa·ger n. 1. a. An agreement under which each bettor pledges a certain amount to the other depending on the outcome of an unsettled matter. b. A matter bet on; a gamble. 2. in Anoka County, Minnesota Anoka County is a county located in the U.S. state of Minnesota. As of 2000, the population was 298,084. Its county seat is Anoka6. Geography According to the U.S. Census Bureau, the county has a total area of 1,156 km² (446 mi²). (approximately 30 miles northeast of downtown Minneapolis), but an anti-gambling group filed two lawsuits against the Racing Commission in attempts to overturn the licenses and block the project. On March 28, 2006, the Court of Appeals affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the decision of the Minnesota Racing Commission to grant the licenses, and on June 21, 2006 the Minnesota Supreme Court The Minnesota Supreme Court is the highest court in the U.S. state of Minnesota and consists of seven members. The court was first assembled as a three-judge panel in 1849 when Minnesota was still a territory. denied a request to review that decision. The second lawsuit lawsuit: see procedure; tort. challenging North Metro's license, alleging that the Racing Commission violated the state's Open Meeting Law, was dismissed by a Ramsey County There are two places in the United States named Ramsey County:
Accordingly, both actions have been finally resolved in favor of upon the side of; favorable to; for the advantage of. See also: favor North Metro. MTR expects North Metro to obtain project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. without recourse A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible. to the Company, though MTR could elect to provide a credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing . Minnesota law permits racetracks to operate a 50-table card room after the completion of the first 50-day race meet and regulatory approval of a card room plan of operations. Strategic Alternatives As previously announced, having rejected the management-led buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. proposal, the Special Committee was dissolved dis·solve v. dis·solved, dis·solv·ing, dis·solves v.tr. 1. To cause to pass into solution: dissolve salt in water. 2. in June of 2006. Accordingly, in the absence of a transaction in which management has an interest, consideration of any strategic alternatives will lie with the full Board of Directors. The Board does not foresee fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. concluding any transactions for the purchase of all or substantially all of the Company's assets at this time, because, among other reasons, such activity would delay the issuance of a slot machine license to Presque Isle Downs. In addition, the Board does not believe that such a transaction would adequately reward the Company's shareholders in the event that recent consideration for the prospect of table gaming in West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. and slot machine gaming in Ohio (discussed above) come to fruition fru·i·tion n. 1. Realization of something desired or worked for; accomplishment: labor finally coming to fruition. 2. Enjoyment derived from use or possession. 3. . The Company will, however, continue to consult with its financial advisors to remain informed of changing market conditions and the availability of other strategic opportunities. Reconciliation of Non-GAAP Measures to GAAP EBITDA represents earnings (losses) before interest, income tax expense (benefit), depreciation and amortization, equity in loss of unconsolidated joint venture and gain (loss) on disposal of property. EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) represents EBITDA as well as ground lease rental payments. EBITDA and EBITDAR are not measures of performance or liquidity calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"), are unaudited and should not be considered alternatives to, or more meaningful than, net income or income from operations as indicators of our operating performance, or cash flows from operating activities, as measures of liquidity. EBITDA and EBITDAR have been presented as supplemental disclosures because they are widely used measures of performance and basis' for valuation of companies in our industry. Uses of cash flows that are not reflected in EBITDA include capital expenditures (which are significant given our expansion), interest payments, income taxes, and debt principal repayments, and in EBITDAR, ground lease rental payments. Moreover, other companies that provide EBITDA and EBITDAR information may calculate EBITDA and EBITDAR differently than we do. A reconciliation of GAAP net income (loss) to EBITDA and EBITDAR is included in the financial tables accompanying this release. Conference Call Management will conduct a conference call focusing on the financial results and recent corporate developments at 10:00 a.m. ET on Thursday, August 3, 2006. Interested parties may participate in the call by dialing 706-679-0882 - please call in 10 minutes before the call is scheduled to begin and ask for the MTR Gaming call (conference ID# 2956397). The conference call will be webcast live via the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.mtrgaming.com. To listen to the live webcast please go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, conference call will be archived on the Investor Relations section of the Company's web site. About MTR Gaming Group MTR Gaming Group, Inc., through subsidiaries, owns and operates the Mountaineer Race Track & Gaming Resort in Chester, West Virginia Chester is a city in Hancock County, West Virginia along the Ohio River. It is part of the Wheeling, West Virginia Metropolitan Statistical Area. The population was 2,592 at the 2000 census. Chester was established in 1896, but not incorporated until 1907. The city is named for J. ; Scioto Downs in Columbus, Ohio; the Ramada ra·ma·da n. Southwestern U.S. 1. a. An open or semienclosed shelter roofed with brush or branches, designed especially to provide shade. b. An open porch or breezeway. 2. Inn and Speedway Casino in North Las Vegas, Nevada; Binion's Gambling Hall & Hotel in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Nevada, and holds a license to build Presque Isle Downs, a thoroughbred Thoroughbred Light breed of racing and jumping horse descended from three desert stallions brought to England between 1689 and 1724. Thoroughbreds have a delicate head, slim body, broad chest, and short back. Most are bay, chestnut, brown, black, or gray. racetrack with pari-mutuel wagering in Erie, Pennsylvania “Erie” redirects here. For other uses, see Erie (disambiguation). Erie (pronounced IPA: /ˈɪəri/) is a major industrial city on the shore of Lake Erie in the northwestern corner of the U.S. . The Company also owns a 90% interest in Jackson Trotting Association, LLC, which operates Jackson Harness Raceway in Jackson, Michigan Jackson is a city located along Interstate 94 in the south central area of the U.S. state of Michigan, about 40 miles (0 km) west of Ann Arbor. It is the county seat of Jackson County, Michigan6. . Additionally, MTR owns a 50% interest in the North Metro Harness Initiative, LLC, which has a license to construct and operate a harness racetrack 30 miles north of downtown Minneapolis. The Mountaineer facility, the Company's primary source of revenues, currently encompasses a thoroughbred racetrack with off-track betting off-track betting n. Abbr. OTB A system of placing bets away from a racetrack. and export simulcasting, 3,220 slot machines, 359 hotel rooms, golf course, spa & fitness center, theater and events center, convention center and fine dining and entertainment. MTR is included on the Russell 2000(R) and Russell(R) 3000 Indexes. For more information, please visit www.mtrgaming.com. Except for historical information, this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. concerning, among other things, the construction of a racetrack and slot machine parlor in Erie, Pennsylvania and a racetrack and card room in Minnesota, the prospects for our operation of Binion's, and the pursuit of strategic alternatives. Such statements are subject to a number of risks and uncertainties that could cause the statements made to be incorrect and/or for actual results to differ materially. Those risks and uncertainties include but are not limited to disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. (occasioned by weather conditions, work stoppages, availability of materials and other factors) in developing our planned Pennsylvania and Minnesota operations and other facilities we may expand and/or acquire, success of our marketing initiatives at Binion's, issuance and the timing of issuance of licenses and the authorization The right or permission to use a system resource; the process of granting access. See access control. to commence operations by the Pennsylvania Gaming Control Board with respect to slot machines at Presque Isle Downs, obtaining financing for North Metro's planned Minnesota operation, the availability of strategic alternatives and our successful negotiation of the terms of any transaction, our compliance with environmental laws and potential exposure to environmental liabilities, and other factors described in the Company's periodic reports filed with the Securities and Exchange Commission. The Company does not intend to update publicly any forward-looking statements, except as may be required by law. The cautionary advice in this paragraph is permitted by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995.
MTR GAMING GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues:
Gaming $78,442 $80,080 $157,520 $147,303
Parimutuel commissions 4,784 3,889 7,968 6,045
Food, beverage and
lodging 11,498 10,845 22,791 17,454
Other 2,584 2,710 4,476 4,575
----------- ----------- ----------- -----------
Total revenues 97,308 97,524 192,755 175,377
Less promotional
allowances (2,380) (2,101) (4,836) (3,458)
----------- ----------- ----------- -----------
Net revenues 94,928 95,423 187,919 171,919
----------- ----------- ----------- -----------
Costs of revenues:
Cost of gaming 46,999 48,947 92,074 88,931
Cost of parimutuel
commissions 3,544 2,780 6,292 4,800
Cost of food, beverage
and lodging 9,675 9,344 18,923 14,497
Cost of other revenue 2,302 2,286 4,078 3,908
----------- ----------- ----------- -----------
Total costs of
revenues 62,520 63,357 121,367 112,136
----------- ----------- ----------- -----------
Gross profit 32,408 32,066 66,552 59,783
----------- ----------- ----------- -----------
Operating expenses:
Marketing and
promotions 3,236 3,050 6,213 4,870
General and
administrative 18,085 16,873 34,663 29,304
Depreciation 5,924 5,494 11,759 10,925
Loss on disposal of
property 236 488 165 472
----------- ----------- ----------- -----------
Total operating
expenses 27,481 25,905 52,800 45,571
----------- ----------- ----------- -----------
Operating income 4,927 6,161 13,752 14,212
Other (expense)
income:
Equity in loss of
unconsolidated joint
venture - (31) - (77)
Interest income 447 40 528 138
Interest expense (4,450) (3,606) (7,912) (7,097)
----------- ----------- ----------- -----------
Income before
provision for income
taxes and minority
interest 924 2,564 6,368 7,176
Provision for income
taxes (504) (962) (2,627) (2,691)
----------- ----------- ----------- -----------
Income before minority
interest 420 1,602 3,741 4,485
Minority interest 52 - 84 -
----------- ----------- ----------- -----------
Net income $472 $1,602 $3,825 $4,485
=========== =========== =========== ===========
Net income per share:
Basic $0.02 $0.06 $0.14 $0.16
Diluted $0.02 $0.06 $0.14 $0.15
Weighted average
number of shares
outstanding:
Basic 27,494,705 28,685,039 27,470,982 28,653,251
Diluted 27,758,279 29,014,264 27,744,063 29,002,279
MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Net revenues:
Mountaineer Park $74,015 $76,454 $145,844 $144,824
Binion's Gambling Hall 15,083 14,521 31,607 19,335
Las Vegas Speedway 2,965 2,627 6,065 5,141
Scioto Downs 1,596 1,815 2,402 2,613
Presque Isle Downs - - - -
Jackson Racing 1,266 - 1,995 -
North Metro - - - -
Corporate 3 6 6 6
--------- -------- --------- ---------
Consolidated $94,928 $95,423 $187,919 $171,919
========= ======== ========= =========
EBITDA:
Mountaineer Park $15,478 $14,640 $32,668 $30,017
Binion's Gambling Hall (523) 770 86 1,642
Las Vegas Speedway 568 322 1,388 664
Scioto Downs (448) (437) (795) (789)
Presque Isle Downs (559) - (559) -
Jackson Racing (37) - (45) -
North Metro (79) - (131) -
Corporate (3,229) (3,152) (6,800) (5,925)
--------- -------- --------- ---------
Consolidated $11,171 $12,143 $25,812 $25,609
========= ======== ========= =========
EBITDAR:
Mountaineer Park $15,478 $14,640 $32,668 $30,017
Binion's Gambling Hall 1,162 2,351 3,441 3,597
Las Vegas Speedway 568 322 1,388 664
Scioto Downs (448) (437) (795) (789)
Presque Isle Downs (559) - (559) -
Jackson Racing (10) - 6 -
North Metro (79) - (131) -
Corporate (3,229) (3,152) (6,800) (5,925)
--------- -------- --------- ---------
Consolidated $12,883 $13,724 $29,218 $27,564
========= ======== ========= =========
MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (continued)
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND EBITDAR
(dollars in thousands)
(unaudited)
The following tables set forth a reconciliation of net income (loss),
a GAAP financial measure, to EBITDA and EBITDAR, non-GAAP financial
measures.
Three Months Ended Six Months Ended
June 30 June 30
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Mountaineer Park:
Net income $5,186 $4,905 $11,455 $10,250
Interest expense, net of
interest income 2,161 2,181 4,315 4,367
Provision for income taxes 3,315 2,943 7,323 6,150
Depreciation 4,848 4,611 9,611 9,240
(Gain) loss on disposal of
property (32) - (36) 10
--------- -------- --------- ---------
EBITDA 15,478 14,640 32,668 30,017
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $15,478 $14,640 $32,668 $30,017
========= ======== ========= =========
Binion's Gambling Hall:
Net (loss) income $(668) $252 $(587) $652
Interest income - - (30) -
(Benefit) provision for income
taxes (427) 152 (375) 392
Depreciation 572 361 1,145 619
Gain (loss) on disposal of
property - 5 (67) (21)
--------- -------- --------- ---------
EBITDA (523) 770 86 1,642
Ground lease rental payments 1,685 1,581 3,355 1,955
--------- -------- --------- ---------
EBITDAR $1,162 $2,351 $3,441 $3,597
========= ======== ========= =========
Las Vegas Speedway:
Net income (loss) $153 $(12) $456 $(15)
Interest expense 102 102 204 205
Provision (benefit) for income
taxes 98 (7) 292 (9)
Depreciation 215 239 436 483
--------- -------- --------- ---------
EBITDA 568 322 1,388 664
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $568 $322 $1,388 $664
========= ======== ========= =========
Scioto Downs:
Net loss $(419) $(430) $(781) $(819)
Interest expense, net of
interest income 28 40 64 81
Benefit for income taxes (268) (258) (500) (492)
Depreciation 211 211 422 441
--------- -------- --------- ---------
EBITDA (448) (437) (795) (789)
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $(448) $(437) $(795) $(789)
========= ======== ========= =========
Presque Isle Downs:
Net loss $(341) $- $(341) $-
Benefit for income taxes (218) - (218) -
--------- -------- --------- ---------
EBITDA (559) - (559) -
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $(559) $- $(559) $-
========= ======== ========= =========
Jackson Racing:
Net loss $(24) $- $(31) $-
Interest expense, net of
interest income and minority
interest 1 - 2 -
Benefit for income taxes, net
of minority interest (16) - (20) -
Depreciation, net of minority
interest 2 - 4 -
--------- -------- --------- ---------
EBITDA (37) - (45) -
Ground lease rental payments 27 - 51 -
--------- -------- --------- ---------
EBITDAR $(10) $- $6 $-
========= ======== ========= =========
MTR GAMING GROUP, INC.
SELECTED FINANCIAL INFORMATION (continued)
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND EBITDAR (continued)
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
North Metro:
Net loss $(49) $- $(81) $-
Interest expense, net of
minority interest 1 - 1 -
Benefit for income taxes, net
of minority interest (31) - (51) -
--------- -------- --------- ---------
EBITDA (79) - (131) -
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $(79) $- $(131) $-
========= ======== ========= =========
Corporate:
Net loss $(3,366) $(3,113) $(6,265) $(5,583)
Interest expense, net of
interest income 1,710 1,243 2,827 2,306
Benefit for income taxes (1,916) (1,868) (3,770) (3,350)
Depreciation 75 72 140 142
Equity in loss of
unconsolidated joint venture - 31 - 77
Loss on disposal of property 268 483 268 483
--------- -------- --------- ---------
EBITDA (3,229) (3,152) (6,800) (5,925)
Ground lease rental payments - - - -
--------- -------- --------- ---------
EBITDAR $(3,229) $(3,152) $(6,800) $(5,925)
========= ======== ========= =========
Consolidated:
Net income $472 $1,602 $3,825 $4,485
Interest expense, net of
interest income and minority
interest 4,003 3,566 7,383 6,959
Provision for income taxes, net
of minority interest 537 962 2,681 2,691
Depreciation 5,923 5,494 11,758 10,925
Equity in loss of
unconsolidated joint venture - 31 - 77
Loss on disposal of property 236 488 165 472
--------- -------- --------- ---------
EBITDA 11,171 12,143 25,812 25,609
Ground lease rental payments 1,712 1,581 3,406 1,955
--------- -------- --------- ---------
EBITDAR $12,883 $13,724 $29,218 $27,564
========= ======== ========= =========
MTR GAMING GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30 December 31
2006 2005
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $19,010 $22,576
Restricted cash 1,385 921
Accounts receivable, net of allowance for
doubtful accounts
of $133 in 2006 and $121 in 2005 8,362 7,558
Accounts receivable - West Virginia Lottery
Commission 3,440 -
Inventories 3,643 3,428
Deferred financing costs 2,678 1,952
Prepaid taxes - 1,352
Deferred income taxes 1,000 1,000
Other current assets 5,453 3,619
----------- -----------
Total current assets 44,971 42,406
Property and equipment, net 281,893 256,167
Goodwill 1,492 1,492
Other intangibles 17,554 17,583
Deferred financing costs, net of current
portion 6,353 3,911
Funds held for construction project 79,811 -
Deposits and other 13,348 13,118
----------- -----------
Total assets $445,422 $334,677
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,920 $9,261
Accounts payable - West Virginia Lottery
Commission 683 1,297
Accrued payroll and payroll taxes 2,928 3,364
Accrued tax liability 599 -
Accrued interest 4,393 3,218
Other accrued liabilities 22,095 18,287
Current portion of capital lease obligations - 3
Current portion of long-term and other debt 463 474
----------- -----------
Total current liabilities 39,081 35,904
Long-term and other debt, net of current
portion 257,874 152,966
Deferred leasehold obligation 5,046 5,090
Long-term deferred compensation 9,314 8,051
Deferred income taxes 8,421 8,746
----------- -----------
Total liabilities 319,736 210,757
Minority interest 3,236 2,944
Shareholders' equity:
Common stock - -
Paid in capital 59,025 61,376
Retained earnings 63,425 59,600
----------- -----------
Total shareholders' equity 122,450 120,976
----------- -----------
Total liabilities and shareholders' equity $445,422 $334,677
=========== ===========
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