For Immediate Release
November 10, 2009
PENINSULA GAMING REPORTS RESULTS FOR THE THIRD QUARTER AND NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2009
Dubuque, IA – November 10, 2009 – Peninsula Gaming, LLC (the "Company") today announced financial results for the third quarter and nine months ended September 30, 2009. The Company is the parent of (i) The Old Evangeline Downs, L.L.C. ("EVD"), which owns and operates the Evangeline Downs Racetrack and Casino in Opelousas, Louisiana and four off-track betting parlors in Louisiana, (ii) Diamond Jo Worth, LLC ("DJW"), which owns and operates the Diamond Jo Casino in Worth County, Iowa, and (iii) Diamond Jo, LLC ("DJL"), which owns and operates the Diamond Jo Casino in Dubuque, Iowa.
($ in thousands)
| | | Three months ended September 30 | | | Nine months ended September 30 | |
| | | 2009 | | | 2008 | | | % change | | | 2009 | | | 2008 | | | % change | |
| Total net revenues | | $ | 71,255 | | | $ | 65,359 | | | | 9.0 | % | | $ | 216,669 | | | $ | 197,309 | | | | 9.8 | % |
| Consolidated Adjusted EBITDA (1) | | $ | 22,092 | | | $ | 20,508 | | | | 7.7 | % | | $ | 67,458 | | | $ | 62,554 | | | | 7.8 | % |
| Income from operations | | $ | 15,241 | | | $ | 14,982 | | | | 1.7 | % | | $ | 45,244 | | | $ | 49,432 | | | | -8.5 | % |
| Net income (loss) | | $ | (20,173 | ) | | $ | 6,181 | | | | NM | | | $ | (11,347 ) | | | $ | 21,647 | | | | NM | |
“Overall we are pleased with our results for the quarter, especially in light of the difficult economic environment and weak consumer market,” said Brent Stevens, Chief Executive Officer of Peninsula Gaming. “Our Diamond Jo Dubuque property is benefiting from the new land-based facility, and we are encouraged that we have been able to maintain strong margins through the move to this larger property. Diamond Jo Worth continues to perform with strong margins and we were actually able to increase our EBITDA margin190 basis points on slightly lower revenue. Evangeline Downs also performed up to our expectations as southern Louisiana was not as negatively impacted as the rest of the country by the weak economy.”
($ in thousands)| | | Net Revenues | | | New Revenues | |
| | | Three months ended September 30 | | | Nine months ended September 30 | |
| | | 2009 | | | 2008 | | | % change | | | 2009 | | | 2008 | | | % change | |
| Diamond Jo Dubuque | | $ | 18,288 | | | $ | 10,968 | | | | 66.7 | % | | $ | 55,953 | | | $ | 31,059 | | | | 80.2 | % |
| Diamond Jo Worth | | $ | 22,301 | | | $ | 22,800 | | | | -2.2 | % | | $ | 64,011 | | | $ | 65,018 | | | | -1.5 | % |
| Evangeline Downs | | $ | 30,666 | | | $ | 31,591 | | | | -2.9 | % | | $ | 96,705 | | | $ | 101,232 | | | | -4.5 | % |
| Total | | $ | 71,255 | | | $ | 65,359 | | | | 9.0 | % | | $ | 216,669 | | | $ | 197,309 | | | | 9.8 | % |
| | | Property Adjusted EBITDA (1) | | | Property Adjusted EBITDA (1) | |
| | | Three months ended September 30 | | | Nine months ended September 30 | |
| | | 2009 | | | 2008 | | | % change | | | 2009 | | | 2008 | | | % change | |
| Diamond Jo Dubuque | | $ | 6,440 | | | $ | 3,981 | | | | 61.8 | % | | $ | 18,799 | | | $ | 10,284 | | | | 82.8 | % |
| Margin | | | 35.2 | % | | | 36.3 | % | | | -110 | bp | | | 33.6 | % | | | 33.1 | % | | | +50 | bp |
| Diamond Jo Worth | | $ | 9,289 | | | $ | 9,074 | | | | 2.4 | % | | | 25,850 | | | | 25,638 | | | | 0.8 | % |
| Margin | | | 41.7 | % | | | 39.8 | % | | | +190 | bp | | | 40.4 | % | | | 39.4 | % | | | +100 | bp |
| Evangeline Downs | | $ | 7,706 | | | $ | 8,533 | | | | -9.7 | % | | | 27,294 | | | | 30,055 | | | | -9.2 | % |
| Margin | | | 25.1 | % | | | 27.0 | % | | | -190 | bp | | | 28.2 | % | | | 29.7 | % | | | -150 | bp |
Mr. Stevens continued, “During the quarter we successfully issued $545 million in two notes offerings that allowed us to extend our debt maturities under our new notes to 2015 and 2017 at favorable market rates. This strengthened our balance sheet and allowed us to close on the purchase of the Amelia Belle casino for $104 million in October. This property will broaden our presence in the Louisiana market allowing us to leverage marketing and overhead costs. We have already started work on upgrading the casino and expect to see improved results starting in 2010. Despite the strong consolidated results in the September quarter, we would caution investors that the Louisiana and Iowa markets are not immune to the overall economic trends. We continue to manage our properties as efficiently as possible and are diligent of cost controls, especially in these difficult times.”
Third Quarter 2009 Results
Net revenues for the third quarter of 2009 were $71.3 million, Consolidated Property Adjusted EBITDA was $23.4 million and Consolidated Adjusted EBITDA was $22.1 million. For the third quarter of 2008, consolidated revenues were $65.4 million, Consolidated Property Adjusted EBITDA was $21.6 million and Consolidated Adjusted EBITDA was $20.5 million.
For the third quarter 2009, on a generally accepted accounting principles ("GAAP") basis, the Company reported a net loss of $20.2 million. The Company took a $22.5 million charge during third quarter 2009 due to the early retirement of debt. GAAP net income for the third quarter 2008 was $6.2 million.
Nine Months 2009 Results
For the nine months ended September 30, 2009, consolidated net revenues were $216.7 million, Consolidated Property Adjusted EBITDA was $71.9 million and Consolidated Adjusted EBITDA was $67.5 million. For the nine months ended September 30, 2008, consolidated net revenues were $197.3 million, Consolidated Property Adjusted EBITDA was $66.0 million and Consolidated Adjusted EBITDA was $62.6 million.
On a GAAP basis, for the first nine months of 2009, the Company reported a net loss of $11.3 million. The Company took a $22.5 million charge during the first nine months of 2009 due to the early retirement of debt. GAAP net income for the first nine months of 2008 was $21.6 million.
Property Highlights
Evangeline Downs Racetrack and Casino
For the third quarter of 2009, EVD's net revenues were $30.7 million, a decrease of $0.9 million from $31.6 million in the third quarter of 2008. Net revenues for the quarter include casino revenues of $25.0 million, racing and off-track betting revenues of $4.9 million, video poker revenues of $1.2 million, and food and beverage and other revenues of $2.9 million, less promotional allowances of $3.3 million. Adjusted EBITDA at EVD during the third quarter of 2009 was $7.7 million, a decline of $0.8 million from $8.5 million in the third quarter of 2008.
For the first nine months of 2009, EVD's net revenues were $96.7 million, a decrease of $4.5 million from $101.2 million for the same period in 2008. Adjusted EBITDA at EVD decreased $2.8 million to $27.3 million for the first nine months of 2009 from $30.1 million for the same period in 2008.
Diamond Jo Worth
Net revenues at DJW during the third quarter of 2009 were $22.3 million, a decrease of $0.5 million from $22.8 million in the third quarter of 2008 due primarily to a reduction in convenience store revenues resulting from lower fuel prices from the prior-year period. Net revenues include casino revenues of $20.7 million, food and beverage revenues of $1.1 million, other revenues (primarily related to gasoline and merchandise sales at the convenience store located adjacent to the casino) of $2.1 million, less promotional allowances of $1.6 million. Adjusted EBITDA at DJW increased $0.2 million to $9.3 million from $9.1 million in the third quarter of 2008.
For the first nine months of 2009, DJW's net revenues were $64.0 million, a decrease of $1.0 million from $65.0 million for the same period in 2008. Adjusted EBITDA at DJW increased to $25.9 million for the first nine months of 2009 from $25.6 million for the same period in 2008.
Diamond Jo Dubuque
Net revenues at DJL for the third quarter of 2009 increased to $18.3 million from $11.0 million in the third quarter of 2008 primarily due to the opening of its new land-based casino. Net revenues for the third quarter of 2009 include casino revenues of $18.2 million and food and beverage and other revenues of $2.4 million, less promotional allowances of $2.3 million. Adjusted EBITDA at DJL for the third quarter of 2009 increased to $6.4 million from $4.0 million for the third quarter of 2008.
For the first nine months of 2009, DJL's net revenues were $56.0 million compared to $31.1 million for the same period in 2008. Adjusted EBITDA at DJL increased $8.5 million to $18.8 million for the first nine months of 2009 from $10.3 million for the same period in 2008.
General Corporate
General corporate cash expenses were $1.3 million for the third quarter of 2009 compared to $1.1 million during the same period in 2008. For the first nine months of 2009, general corporate cash expenses were $4.5 million compared to $3.4 million during the same period in 2008.
Liquidity and Capital Resources
The Company ended the quarter with $128.7 million in cash and cash equivalents on hand, and $5.3 million in restricted cash. Total debt outstanding was $541.2 million. Including outstanding letters of credit, the Company had $63.6 million available under its $65.0 million revolving credit facility at September 30, 2009.
During the third quarter of 2009, the Company had cash outflows of $3.2 million related to capital expenditures. Of this amount, $0.7 million and $0.6 million related to the casino floor remodel project and the development of the event center at EVD, respectively. The Company had maintenance capital expenditures at its three properties of approximately $1.7 million.
On August 6, 2009, the Company and Peninsula Gaming Corp., as co-issuers, issued $240.0 million in aggregate principal amount of 8 3/8% Senior Secured Notes due 2015 and $305.0 million in aggregate principal amount of 10 ¾% Senior Unsecured Notes due 2017. The Senior Secured Notes and Senior Unsecured Notes were issued at a discount of $5.5 million and $7.9 million, respectively. Interest on both the Senior Secured Notes and Senior Unsecured Notes is due each August 15 and February 15, commencing February 15, 2010.
Subsequent Event – Amelia Belle Casino Acquisition
On October 22, 2009, the Company completed the acquisition of the Amelia Belle Casino located in Amelia, Louisiana from Columbia Properties New Orleans, L.L.C. The transaction was consummated for $104.0 million, plus $2.2 million in working capital, funded with cash on hand. The Amelia Belle Casino has over 800 slot machines and a wide variety of table games and is located just 90 miles from Evangeline Downs Racetrack and Casino.
On October 29, 2009, the Company entered into an amended and restated loan and security agreement with Wells Fargo Foothill, Inc. as the arranger and agent. The credit facility is a revolving credit facility which permits the Company to request advances and letters of credit up to the lesser of the maximum revolver amount of $58.5 million (less amounts outstanding under letters of credit) and a specified borrowing base. The borrowings under the credit facility bear interest at a rate equal to the Wells Fargo prime rate plus a margin of 2.5% with a floor of 6%.
Non-GAAP Financial Measures
(1) We define EBITDA as earnings (loss) before interest (including loss on early retirement of debt), taxes, and depreciation and amortization (including impairment charges). We define Consolidated Adjusted EBITDA as EBITDA adjusted, as applicable, for non-cash equity based compensation, development expense, pre-opening expense, affiliate management fees and gain or loss on disposal of assets. We define Consolidated Property Adjusted EBITDA as the sum of Adjusted EBITDA at EVD, DJW and DJL. We believe that Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA are useful measures in evaluating our operating performance because (i) our investors and other interested parties use these measures as a measure of financial performance and debt service capabilities, (ii) our management uses these measures for internal planning purposes, including evaluating aspects of our operating budget, our ability to meet future debt service, and our capital expenditure and working capital requirements, and (iii) our board of managers and management use these measures for determining certain management compensation targets and thresholds. We believe that Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA are more useful for these purposes than EBITDA because their use facilitates measuring operating performance on a more consistent basis by removing the impact of certain items not directly resulting from the operation of our business in the ordinary course.
However, EBITDA, Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA are not measures of financial performance under GAAP. Accordingly, the use of these measures should not be construed as an alternative to operating income, as an indicator of the Company's operating performance, or as an alternative to cash flow from operating activities, as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. The Company has significant uses of cash, including capital expenditures, interest payments and debt principal repayments, which are not reflected in Consolidated Adjusted EBITDA or Consolidated Property Adjusted EBITDA.
Because Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA exclude some, but not all, items that affect net income (loss), the use of these measures may vary among companies and may not be comparable to similarly titled measures of other companies.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to general economic conditions, competition, risks associated with new ventures, government regulation, including, licensure requirements, legalization of gaming, availability of financing on commercially reasonable terms, changes in interest rates, future terrorist acts, and other factors detailed in the reports filed by the Company with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company assumes no obligation to update such information.
Peninsula Gaming, LLC
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands)
| | | Three Months Ended September 30, 2009 | | | Three Months Ended September 30, 2008 | | | Nine Months Ended September 30, 2009 | | | Nine Months Ended September 30, 2008 | |
| REVENUES: | | | | | | | | | | | | |
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Less promotional allowances | | | | | | | | | | | | | | | | |
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Selling, general and administrative | | | | | | | | | | | | | | | | |
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Affiliate management fees | | | | | | | | | | | | | | | | |
Loss on disposal of assets | | | | | | | | | | | | | | | | |
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Interest expense, net of amounts capitalized | | | | | | | | | | | | | | | | |
Loss on early retirement of debt | | | | | | | | | | | | | | | | |
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Peninsula Gaming, LLC
Supplemental Data Schedule (Unaudited)
(In thousands)
The following is a reconciliation of Consolidated Property Adjusted EBITDA and Consolidated Adjusted EBITDA to Net (Loss) Income:
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
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Consolidated Property Adjusted EBITDA (1) | | | | | | | | | | | | | | | | |
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Consolidated Adjusted EBITDA (1) | | | | | | | | | | | | | | | | |
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Non-cash equity based compensation | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | | | | | |
Affiliate management fees | | | | | | | | | | | | | | | | |
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Depreciation and amortization | | | | | | | | | | | | | | | | |
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Loss on disposal of assets | | | | | | | | | | | | | | | | |
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Loss on early retirement of debt | | | | | | | | | | | | | | | | |
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Depreciation and amortization | | | | | | | | | | | | | | | | |
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Affiliate management fees | | | | | | | | | | | | | | | | |
Loss on disposal of assets | | | | | | | | | | | | | | | | |
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Loss on early retirement of debt | | | | | | | | | | | | | | | | |
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Depreciation and amortization | | | | | | | | | | | | | | | | |
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Affiliate management fees | | | | | | | | | | | | | | | | |
Loss on disposal of assets | | | | | | | | | | | | | | | | |
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Loss on early retirement of debt | | | | | | | | | | | | | | | | |
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Contact:
Peninsula Gaming, LLC
301 Bell Street
Dubuque, Iowa 52001
Natalie A. Schramm, 563-690-4977
