Exhibit 99.1
PENINSULA GAMING, LLC REPORTS RECORD SECOND QUARTER 2007 RESULTS
Net Revenues of $67.0 million for the three month period and $125.3 million for the six month period ended June 30, 2007
Consolidated Property Adjusted EBITDA of $22.2 million for three month period and $41.7 million for the six month period and ended June 30, 2007
DUBUQUE, IA, August 14, 2007 — Peninsula Gaming, LLC (the “Company”) today reported financial results for the second quarter and six months ended June 30, 2007. The Company is the parent of (i) The Old Evangeline Downs, LLC (“EVD”), which owns and operates 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.
A conference call for investors will not be held this quarter.
Second Quarter Results
Net revenues were $67.0 million, Consolidated Property Adjusted EBITDA(1) was $22.2 million and consolidated Adjusted EBITDA(1) was $15.3 million. The second quarter’s results reflect continued strong performances at EVD and DJW offset by continued challenges at DJL. DJL, consistent with the past few quarters, continued to feel the impact of increased competition from the expansion of a local competitor. For the second quarter of 2006, consolidated revenues were $64.6 million, Consolidated Property Adjusted EBITDA was $20.7 million and consolidated Adjusted EBITDA was $18.2 million.
For the second quarter 2007, on a generally accepted accounting principles (“GAAP”) basis, the Company reported net loss of $1.0 million. The 2007 second quarter results reflect a $3.9 million non-cash charge increase at the corporate level related to equity incentive grants and a $1.4 million increase in interest expense related to the issuance of senior secured notes in December 2006 to assist in financing the DJL land-based casino project and the proposed hotel and event center development at EVD. GAAP net income for the 2006 second quarter was $2.9 million.
The Company ended the quarter with $59.2 million of cash, $5.9 million of which was restricted. Total debt outstanding was $366.7 million. Including outstanding letters of credit, EVD and DJL had $49.0 million available under its $50 million revolving credit facility, and DJW had $4.3 million available under its $5.0 million revolving credit facility.
During the second quarter of 2007, the Company had cash outflows of $15.5 million related to capital expenditures. Of this amount, $10.9 million related to construction and development activities surrounding the new casino expansion at DJW, $2.3 million related to construction and development activities surrounding the new casino project at DJL, and $0.9 million related to construction and development activities at EVD with respect to (i) a proposed new hotel and
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event center, (ii) the relocation of an OTB in New Iberia, Louisiana and (iii) the expansion of our existing OTB in Henderson, Louisiana to allow for the addition of 44 video poker machines. In addition, the Company had maintenance capital expenditures at its three properties of approximately $1.4 million.
Six-Month Results
For the six months ended June 30, 2007, consolidated net revenues were $125.3 million, Consolidated Property Adjusted EBITDA(1) was $41.7 million and consolidated Adjusted EBITDA(1) was $32.6 million. The six-month results reflect strong performances at EVD and DJW, with DJL continuing to see the impact of increased competition from the expansion of a local competitor. For the 2006 second quarter, consolidated net revenues were $115.3 million, Consolidated Property Adjusted EBITDA was $37.4 million and consolidated Adjusted EBITDA was $33.2 million.
On a GAAP basis, for the first six months of 2007, the Company reported net loss of $0.5 million. The 2007 results reflect a $4.2 million increase in non-cash charges at the corporate level related to equity incentive grants and increased interest expense of $3.0 million related to the issuance of senior secured notes in December 2006 to assist in financing of the DJL land-based casino project and the proposed hotel and event center development at EVD. GAAP net income for the first six months of 2006 was $5.0 million.
Recent Developments
· On April 27, 2007, DJW opened its expanded casino floor to the public. The casino currently includes 891 slot machines, 26 table games, a 7 table poker room and an expanded casino bar. DJW completed the expansion project with the opening of a new buffet restaurant in June 2007 and a banquet and event center in July 2007.
· In June 2007, DJL began construction on its new $78 million land-based casino to be located in the Port of Dubuque in close proximity to its current riverboat facility, which will cease operations upon the opening of the new casino. The casino is expected to include approximately 1,000 slot machines, 17 tables, a five table poker room, a 30 lane bowling center and four dining outlets. The casino is expected to open in the Fall of 2008.
Property Highlights
Evangeline Downs Racetrack and Casino
For the second quarter of 2007, EVD’s net revenues were $36.0 million, an increase of 3% from $34.8 million in the second quarter of 2006. Net revenues for the quarter include casino revenues of $27.6 million, racing and off-track betting revenues of $6.7 million, video poker revenues of $1.0 million, and food and beverage and other revenues of $3.2 million, less promotional allowances of $2.5 million. Adjusted EBITDA at EVD increased $1.4 million, or 15%, to $10.7 million from $9.3 million in the second quarter of 2006. This increase is primarily attributable to a $1.2 million increase in net revenues as well as a $0.3 million decrease in casino
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and racing expenses which is a direct result of our continued focus on controlling labor and other operating expenses.
Diamond Jo Worth
Net revenues at Diamond Jo Worth during the second quarter of 2007 were $20.7 million, an increase of $2.2 million from the second quarter of 2006 due primarily to the opening of the new casino expansion in April 2007. Net revenues include casino revenues of $19.5 million, food and beverage revenues of $0.7 million, other revenues (primarily related to gasoline and merchandise sales at the convenience store located adjacent to the casino) of $2.0 million, less promotional allowances of $1.5 million. As a result of the increased net revenues, Adjusted EBITDA at DJW increased $0.5 million to $8.2 million from $7.7 million in the second quarter of 2006.
Diamond Jo Dubuque
Net revenues at the Diamond Jo decreased 9% to $10.3 million from $11.3 million in the second quarter 2006. Net revenues include casino revenue of $10.3 million and food and beverage and other revenues of $1.2 million, less promotional allowances of $1.2 million. Adjusted EBITDA at the Diamond Jo decreased to $3.3 million from $3.7 million in the second quarter of 2006. We believe the decrease was attributable to increased competition in our primary market, including competition resulting from the expansion of a local competitor’s facility and the opening of a new land-based casino approximately 110 miles southwest of Dubuque.
Corporate
General corporate expenses increased approximately $4.5 million to $7.0 million from $2.5 million over the second quarter of 2006 due primarily to an increase in non-cash equity incentive grant charges of $3.9 million.
Non-GAAP Financial Measures
(1) We define EBITDA as earnings before interest, taxes, depreciation and amortization, including impairment charges. We define Adjusted EBITDA as EBITDA adjusted for 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 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 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, Adjusted EBITDA and Consolidated Property Adjusted EBITDA are not
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measures of financial performance under accounting principles generally accepted in the United States (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 Adjusted EBITDA or Consolidated Property Adjusted EBITDA. Because Adjusted EBITDA and Consolidated Property Adjusted EBITDA exclude some, but not all, items that affect net income, the use of these measures may vary among companies and as presented by the Company 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.
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Peninsula Gaming, LLC
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands)
| | Three Months
Ended
June 30, 2007 | | Three Months
Ended
June 30, 2006 | | Six Months
Ended
June 30, 2007 | | Six Months
Ended
June 30, 2006 | |
REVENUES: | | | | | | | | | |
Casino | | $ | 57,320 | | $ | 54,864 | | $ | 110,184 | | $ | 96,319 | |
Racing | | 6,658 | | 6,530 | | 10,120 | | 13,232 | |
Video poker | | 1,057 | | 882 | | 2,194 | | 1,621 | |
Food and beverage | | 4,253 | | 4,094 | | 7,672 | | 7,624 | |
Other | | 2,936 | | 2,895 | | 5,299 | | 4,833 | |
Less promotional allowances | | (5,234 | ) | (4,718 | ) | (10,140 | ) | (8,353 | ) |
Total net revenues | | 66,990 | | 64,547 | | 125,329 | | 115,276 | |
| | | | | | | | | |
EXPENSES: | | | | | | | | | |
Casino | | 24,308 | | 23,169 | | 46,647 | | 41,830 | |
Racing | | 5,356 | | 5,481 | | 8,273 | | 10,969 | |
Video poker | | 863 | | 724 | | 1,692 | | 1,247 | |
Food and beverage | | 3,345 | | 3,257 | | 6,069 | | 5,786 | |
Other | | 1,977 | | 1,934 | | 3,228 | | 3,158 | |
Selling, general and administrative | | 15,844 | | 11,774 | | 26,865 | | 19,044 | |
Depreciation and amortization | | 5,105 | | 5,628 | | 10,054 | | 9,808 | |
Pre-opening expense | | 160 | | 175 | | 243 | | 874 | |
Development expense | | 139 | | 106 | | 1,784 | | 130 | |
Affiliate management fees | | 1,417 | | 1,253 | | 2,572 | | 2,034 | |
Loss on sale of assets | | 16 | | 74 | | 97 | | 44 | |
Total expenses | | 58,530 | | 53,575 | | 107,524 | | 94,924 | |
| | | | | | | | | |
INCOME FROM OPERATIONS | | 8,460 | | 10,972 | | 17,805 | | 20,352 | |
| | | | | | | | | |
OTHER INCOME (EXPENSE): | | | | | | | | | |
Interest income | | 576 | | 113 | | 1,299 | | 316 | |
Interest expense, net of amounts capitalized | | (9,989 | ) | (8,069 | ) | (19,611 | ) | (15,485 | ) |
Interest expense related to preferred member’s interest, redeemable | | — | | (90 | ) | — | | (180 | ) |
Total other expense | | (9,413 | ) | (8,046 | ) | (18,312 | ) | (15,349 | ) |
| | | | | | | | | |
| | | | | | | | | |
NET INCOME (LOSS) | | $ | (953 | ) | $ | 2,926 | | $ | (507 | ) | $ | 5,003 | |
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Peninsula Gaming, LLC
Supplemental Data Schedule (Unaudited)
(In thousands)
The following is a reconciliation of Adjusted EBITDA to Net Income (Loss):
| | Adjusted EBITDA
Three Months Ended June 30, (1) | | Adjusted EBITDA
Six Months Ended June 30, (1) | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Diamond Jo Dubuque | | 3,300 | | 3,670 | | 6,284 | | 7,431 | |
Diamond Jo Worth | | 8,150 | | 7,691 | | 14,712 | | 7,743 | |
Evangeline Downs | | 10,710 | | 9,301 | | 20,697 | | 22,231 | |
Consolidated Property Adjusted EBITDA (1) | | 22,160 | | 20,662 | | 41,693 | | 37,405 | |
General corporate | | $ | (6,863 | ) | $ | (2,454 | ) | $ | (9,138 | ) | $ | (4,163 | ) |
Total Adjusted EBITDA (1) | | 15,297 | | 18,208 | | 32,555 | | 33,242 | |
General corporate: | | | | | | | | | |
Depreciation and amortization | | (11 | ) | | | (22 | ) | | |
Affiliate management fees | | (113 | ) | (63 | ) | (191 | ) | (140 | ) |
Interest income | | 258 | | | | 509 | | | |
Diamond Jo: | | | | | | | | | |
Depreciation and amortization | | (1,208 | ) | (973 | ) | (2,387 | ) | (1,968 | ) |
Development expense | | (83 | ) | (42 | ) | (1,716 | ) | (54 | ) |
Pre-opening expense | | (23 | ) | | | (23 | ) | | |
Gain (loss) on disposal of assets | | (15 | ) | | | (76 | ) | 25 | |
Interest expense, net | | (2,561 | ) | (2,346 | ) | (5,073 | ) | (4,700 | ) |
Diamond Jo Worth: | | | | | | | | | |
Depreciation and amortization | | (1,716 | ) | (1,078 | ) | (3,004 | ) | (1,096 | ) |
Pre-opening expense | | (137 | ) | (175 | ) | (196 | ) | (855 | ) |
Affiliate management fees | | (793 | ) | (723 | ) | (1,414 | ) | (843 | ) |
Interest expense, net | | (2,938 | ) | (1,169 | ) | (5,445 | ) | (1,589 | ) |
Gain (loss) on disposal of assets | | | | (76 | ) | | | (76 | ) |
Development expense | | | | (44 | ) | | | (44 | ) |
Evangeline Downs: | | | | | | | | | |
Depreciation and amortization | | (2,170 | ) | (3,577 | ) | (4,641 | ) | (6,744 | ) |
Development expense | | (56 | ) | (20 | ) | (68 | ) | (32 | ) |
Pre-opening expense | | | | | | (24 | ) | (19 | ) |
Affiliate management fees | | (511 | ) | (467 | ) | (967 | ) | (1,051 | ) |
Gain (loss) on disposal of assets | | (1 | ) | 2 | | (21 | ) | 7 | |
Interest expense, net | | (4,172 | ) | (4,531 | ) | (8,303 | ) | (9,060 | ) |
Net income (loss) | | $ | (953 | ) | $ | 2,926 | | $ | (507 | ) | $ | 5,003 | |
Contacts:
Peninsula Gaming, LLC
Natalie A. Schramm, 563-690-2120
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