DETROIT, Aug. 14, 2012 /PRNewswire/ --Greektown Superholdings, Inc. ("Greektown" or the "company") today reported financial results for its second quarter ended June 30, 2012. Financial highlights for the second quarter include:
- Net revenues for the three months ended June 30, 2012 were $83.5 million compared to $84.0 million for the same quarter of 2011, a decrease of 0.5%.
- Income from operations for the second quarter increased to $9.9 million compared to $9.3 million a year ago.
- Net loss increased to $6.3 million compared to $3.3 million a year ago. Net loss for the second quarter of 2011 included $3.8 million of deferred income tax benefit related to the repeal of the Michigan Business Tax.
- EBITDA(1) decreased by 5.4%, to $18.4 million in the second quarter of 2012 from $19.5 million in the same quarter of 2011.
"Although we were affected by the softness of the Detroit gaming market in the second quarter, we increased net revenues in both April and May compared to the same periods a year ago," said Michael Puggi, Greektown's president and chief executive officer. "In addition, while we believe the opening of casinos in Ohio has negatively affected the Detroit gaming market, the impact has been consistent with our expectations."
"We will continue to focus on managing expenses and increasing operating efficiencies," continued Puggi. "At the same time, we are continuing our efforts to improve the guest experience. Construction of our new 850-space valet garage continues on schedule, and is expected to open in the first quarter of 2013. In addition, we are in the process of enhancing our dining offerings, including the addition of a fine-dining restaurant within the casino and a fresh market-style dining venue. Our guests are excited about the changes, and we expect that the property enhancements we're making will draw new customers to Greektown Casino-Hotel as well."
Year-To-Date Results
Net revenues for the six months ended June 30, 2012 were $175.4 million compared to $169.4 million for the same period ended of 2011, an increase of 3.5%. Income from operations for the six months ended June 30, 2012 increased to $24.9 million compared to $18.2 million a year ago, and net loss decreased to $7.5 million compared to $11.8 million a year ago. EBITDA(1) increased by 11.7%, to $42.1 million for the six months ended 2012 from $37.7 million in the same period of 2011. Net loss for the six months ended June 30, 2011 included $1.1 million of expense related to Chapter 11 reorganization items.
Cash and cash equivalents were $58.4 million at June 30, 2012, compared to $45.1 million at June 30, 2011, and the company did not borrow against its revolving loan agreement during the first half of 2012. The company paid semiannual interest of approximately $25.0 million on its senior secured notes on July 2, 2012 and July 1, 2011.
(1) EBITDA (earnings before interest, taxes, depreciation and amortization) is a measurement not in accordance with U.S. Generally Accepted Accounting Principles (GAAP) but is commonly used in the gaming industry as a measure of performance and as a basis for valuation of gaming companies. Reconciliation of net loss to EBITDA is attached to this release. EBITDA is a supplemental financial measure used by management, as well as industry analysts, to evaluate our operations. However, EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with GAAP. All companies do not calculate EBITDA in the same manner. As a result, the Company's EBITDA may not be comparable to similarly titled measures presented by other companies.
About Greektown Superholdings, Inc.
Greektown Superholdings, Inc. operates, through its subsidiaries, the Greektown Casino-Hotel. Located in the heart of Detroit's Greektown Dining and Entertainment District, Greektown Casino-Hotel opened on November 10, 2000. Greektown Casino-Hotel offers such amenities as the Eclipz Lounge, Asteria, The Fringe, Shotz Sports Bar & Grill, Bistro 555 and a VIP lounge for players. Greektown Casino-Hotel opened its 400-room hotel tower in February 2009 and recently became the first Michigan casino to debut a smartphone application. For more information, visit greektowncasinohotel.com.
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about capitalization and performance of Greektown. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and words such as "anticipate," "expect," "will," "continue," or other similar words or phrases are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in other press releases, written statements or documents filed with the Securities and Exchange Commission are subject to known and unknown risks, uncertainties and contingencies, including competitive factors (such as the impact of existing and planned casinos in Ohio), as well as the potential ballot initiative to expand the number of commercial casinos within the state of Michigan, and the successful execution of potential financing transactions, and there can be no assurance that the expected benefits of our new projects will be realized. Many of these risks, uncertainties and contingencies are beyond Greektown's control, and may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Any forward-looking statements in this release speak only as of the date of this release, and Greektown undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
Greektown Superholdings, Inc. | ||||
Consolidated Statements of Operations (unaudited) | ||||
(In thousands, except share and per share data) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2012 | 2011 | 2012 | 2011 | |
Revenues | ||||
Casino | $ 87,861 | $ 89,616 | $ 183,229 | $ 177,919 |
Food and beverage | 5,845 | 5,782 | 12,265 | 11,916 |
Hotel | 3,110 | 2,740 | 6,060 | 5,392 |
Other | 1,361 | 1,194 | 2,698 | 2,494 |
Gross revenues | 98,177 | 99,332 | 204,252 | 197,721 |
Less promotional allowances | 14,646 | 15,365 | 28,884 | 28,277 |
Net revenues | 83,531 | 83,967 | 175,368 | 169,444 |
Operating expenses | ||||
Casino | 20,189 | 19,823 | 41,430 | 40,093 |
Gaming taxes | 18,880 | 19,263 | 39,444 | 38,339 |
Food and beverage | 4,007 | 4,635 | 8,765 | 10,250 |
Hotel | 2,493 | 2,192 | 5,110 | 4,630 |
Marketing, advertising, and entertainment | 2,459 | 1,976 | 3,794 | 3,697 |
Facilities | 4,838 | 4,891 | 10,107 | 10,248 |
Depreciation and amortization | 8,548 | 10,317 | 17,180 | 20,587 |
General and administrative expenses | 12,050 | 11,495 | 24,390 | 23,169 |
Other | 166 | 105 | 309 | 186 |
Operating expenses | 73,630 | 74,697 | 150,529 | 151,199 |
Income from operations | 9,901 | 9,270 | 24,839 | 18,245 |
Other expenses | ||||
Interest expense | (12,598) | (12,631) | (25,251) | (25,221) |
Amortization of finance fees | (1,844) | (1,703) | (3,681) | (3,391) |
Other income (expense), net | 2 | 3 | 57 | (9) |
Chapter 11 related reorganization items | - | (95) | - | (1,149) |
Total other expense, net | (14,440) | (14,426) | (28,875) | (29,770) |
Loss before provisions for state income taxes | (4,539) | (5,156) | (4,036) | (11,525) |
Income tax expense - current | (73) | (313) | (146) | (864) |
Income tax (expense) benefit - deferred | (1,682) | 2,151 | (3,364) | 551 |
Net loss | $ (6,294) | $ (3,318) | $ (7,546) | $ (11,838) |
Loss per share: | ||||
Basic | $ (72.49) | $ (53.90) | $ (110.64) | $ (144.88) |
Diluted | $ (72.49) | $ (53.90) | $ (110.64) | $ (144.88) |
Weighted average common shares outstanding | 146,028 | 141,179 | 145,786 | 140,957 |
Weighted average common and common equivalent shares outstanding | 146,028 | 141,179 | 145,786 | 140,957 |
Greektown Superholdings, Inc. | ||
Consolidated Balance Sheets | ||
(In thousands, except share and per share data) | ||
June 30, | December 31, | |
2012 | 2011 | |
(unaudited) | ||
Assets | ||
Current assets: | ||
Cash and cash equivalents | $ 58,437 | $ 50,754 |
Accounts receivable - gaming, net | 695 | 734 |
Accounts receivable - other, net | 1,169 | 1,216 |
Inventories | 353 | 398 |
Prepaid expenses | 6,151 | 5,605 |
Prepaid Michigan Gaming Control Board annual fee | 3,695 | 8,823 |
Prepaid municipal services fees | 1,026 | 3,346 |
Deposits | 1,631 | 1,631 |
Total current assets | 73,157 | 72,507 |
Property, building, and equipment, net | 320,996 | 317,085 |
Other assets: | ||
Financing fees - net of accumulated amortization | 9,972 | 11,571 |
Deposits and other assets | 30 | 30 |
Casino development rights | 117,800 | 117,800 |
Trade names | 26,300 | 26,300 |
Rated player relationships - net of accumulated amortization | 41,400 | 48,300 |
Goodwill | 110,252 | 110,252 |
Total assets | $ 699,907 | $ 703,845 |
Liabilities and shareholders' equity | ||
Current liabilities: | ||
Accounts payable | 12,416 | 15,128 |
Accrued interest | 25,082 | 25,063 |
Accrued expenses and other liabilities | 10,132 | 9,631 |
Total current liabilities | 47,630 | 49,822 |
Long-term liabilities: | ||
Other accrued income taxes | 9,018 | 8,871 |
Senior secured notes - net | 369,723 | 367,748 |
Obligation under capital lease | 2,480 | 2,489 |
Deferred income taxes | 13,458 | 10,094 |
Total long-term liabilities | 394,679 | 389,202 |
Total liabilities | 442,309 | 439,024 |
Shareholders' equity (members' deficit): | ||
Series A-1 preferred stock at $0.01 par value; | ||
1,688,268 shares authorized, 1,463,535 shares issued and outstanding at June 30, 2012 and December 31, 2011 | 185,396 | 185,396 |
Series A-2 preferred stock at $0.01 par value; | ||
645,065 shares authorized, 162,255 shares issued and outstanding at June 30, 2012 and December 31, 2011 | 20,551 | 20,551 |
Series A-1 preferred warrants at $0.01 par value; | ||
202,511 shares issued and outstanding at June 30, 2012 and December 31, 2011 | 25,651 | 25,651 |
Series A-2 preferred warrants at $0.01 par value; | ||
460,587 shares issued and outstanding at June 30, 2012 and December 31, 2011 | 58,342 | 58,342 |
Series A-1 common stock at $0.01 par value; | ||
4,354,935 shares authorized,146,028 and 142,423 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively | 1 | 1 |
Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued | - | - |
Additional paid-in capital | 13,975 | 13,652 |
Accumulated deficit | (46,318) | (38,772) |
Total shareholders' equity | 257,598 | 264,821 |
Total liabilities and shareholders' equity | $ 699,907 | $ 703,845 |
Greektown Superholdings, Inc. | ||
Consolidated Statements of Cash Flows (unaudited) | ||
(In thousands) | ||
Six Months Ended June 30, | ||
2012 | 2011 | |
Operating activities | ||
Net loss | $ (7,546) | $ (11,838) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 17,180 | 20,587 |
Amortization of finance fees and accretion of discount on senior notes | 3,681 | 3,391 |
Chapter 11 related reorganization items | - | 1,149 |
Deferred income taxes | 3,364 | (551) |
Stock based compensation | 323 | 203 |
Changes in current assets and liabilities: | ||
Accounts receivable - gaming | 39 | (78) |
Accounts receivable - other | 47 | 499 |
Property tax refund receivable | - | 3,451 |
Inventories | 45 | 9 |
Prepaid expenses | 6,902 | 8,346 |
Accounts payable | (2,712) | 1,208 |
Unsecured distribution liability | - | (10,000) |
Accrued interest | 19 | (101) |
Accrued expenses and other liabilities | 945 | (975) |
Net cash provided by operating activities before reorganization costs | 22,287 | 15,300 |
Operating cash flows for reorganization costs | - | (799) |
Net cash provided by operating activities | 22,287 | 14,501 |
Investing activities | ||
Decrease in restricted cash | - | 5,000 |
Capital expenditures | (14,496) | (5,051) |
Redemption of certificate of deposit | - | 534 |
Net cash (provided by) used in investing activities | (14,496) | 483 |
Financing activities | ||
Financing fees paid | (108) | (84) |
Net cash used in financing activities | (108) | (84) |
Net increase in cash and cash equivalents | 7,683 | 14,900 |
Cash and cash equivalents at beginning of period | 50,754 | 30,195 |
Cash and cash equivalents at end of period | $ 58,437 | $ 45,095 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | $ 25,101 | $ 25,438 |
Cash paid during the period for income taxes | $ - | $ 451 |
Greektown Superholdings, Inc. | ||||
Reconciliation of Net Loss to EBITDA (1) | ||||
(In thousands) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2012 | 2011 | 2012 | 2011 | |
Net loss | $ (6,294) | $ (3,318) | $ (7,546) | $ (11,838) |
Interest expense | 14,439 | 14,331 | 28,932 | 28,612 |
Tax expense (benefit) tax | 1,755 | (1,838) | 3,510 | 313 |
Depreciation and amortization | 8,548 | 10,317 | 17,180 | 20,587 |
EBITDA (1) | $ 18,448 | $ 19,492 | $ 42,076 | $ 37,674 |
(1) EBITDA (earnings before interest, taxes, depreciation and amortization) is a measurement not in accordance with U.S. Generally Accepted Accounting Principles (GAAP) but is commonly used in the gaming industry as a measure of performance and as a basis for valuation of gaming companies. EBITDA is a supplemental financial measure used by management, as well as industry analysts, to evaluate our operations. However, EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with GAAP. All companies do not calculate EBITDA in the same manner. As a result, the Company's EBITDA may not be comparable to similarly titled measures presented by other companies. |
SOURCE Greektown Superholdings, Inc.
