For Immediate Release
May 12, 2010
PENINSULA GAMING REPORTS RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2010
Dubuque, IA – May 12, 2010 – Peninsula Gaming, LLC (the "Company") today announced financial results for the first quarter ended March 31, 2010. The Company is the parent of (i) Diamond Jo, LLC ("DJL"), which owns and operates the Diamond Jo Casino in Dubuque, Iowa, (ii) Diamond Jo Worth, LLC ("DJW"), which owns and operates the Diamond Jo Casino in Worth County, Iowa, (iii) 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, and (iv) Belle of Orleans, L.L.C. (“ABC”), which owns and operates the Amelia Belle Casino in Amelia, Louisiana.
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| | | Three months ended March 31, | |
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Consolidated Adjusted EBITDA (1) | | | | | | | | | | | | |
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| ($ in thousands) | | Net Revenues | |
| | | Three months ended March 31, | |
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| ($ in thousands) | | Adjusted EBITDA(1) by Property | |
| | | Three months ended March 31, | |
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Total Consolidated Property Adjusted EBITDA (1) | | | | | | | | | | | | |
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| (1) | See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA, Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA and more information relating to such non-GAAP financial measures. |
“Overall, the difficult operating environment that we have seen over the past few quarters continued in the first quarter of 2010,” said Brent Stevens, Chief Executive Officer of the Company. “At Evangeline Downs, we experienced declines that once again reflected the weak economy in the central and south Louisiana markets. Both of our Iowa properties were impacted by a significant amount of snowfall during the first quarter of 2010. In addition, our Diamond Jo Dubuque property saw a decline in revenue due to increased competition from the prior-year quarter; however, we were pleased to once again see margin growth at the facility – a testament to our management team’s performance in the face of these challenges. Our Diamond Jo Worth property performed to expect ations on the top line while we saw sizable margin gains due once again to prudent operating improvement initiatives. And at our newest property, the Amelia Belle Casino, revenue was affected in the quarter by disruptions caused by the renovation of our casino floor, which was substantially complete by the end of the quarter, as well as the weak market conditions cited previously. We continue to believe that the remainder of 2010 will be a difficult operating environment, but our strategy remains the same – concentrating on optimizing our current operations and looking to grow the company in a rational and prudent manner.”
First Quarter 2010 Results
Net revenues for the first quarter of 2010 were $78.0 million, Consolidated Property Adjusted EBITDA was $26.5 million and Consolidated Adjusted EBITDA was $25.0 million. For the first quarter of 2009, consolidated revenues were $72.0 million, Consolidated Property Adjusted EBITDA was $24.1 million and Consolidated Adjusted EBITDA was $22.5 million.
For the first quarter 2010, on a generally accepted accounting principles ("GAAP") basis, the Company reported net income of $1.8 million. Net income for the first quarter 2009 on a GAAP basis was $3.8 million.
Property Highlights
Diamond Jo Dubuque
Net revenues at DJL for the first quarter of 2010 declined to $17.3 million from $19.7 million in the first quarter of 2009 primarily due to disruptions from record snowfall in Dubuque, enhanced competition from the closest competitor which had undergone construction in the first quarter of 2009, and a stabilization of market share since the opening of DJL’s land-based facility in December 2008. Net revenues for the first quarter of 2010 include casino revenues of $16.9 million and food and beverage and other revenues of $2.7 million, less promotional allowances of $2.3 million. Adjusted EBITDA at DJL for the first quarter of 2010 decreased to $5.9 million from $6.5 million for the first quarter of 2009; however, continued cost containment programs resulted in a 110 basis point increase in Adjusted EBITDA margi n to 34.2% for the quarter.
Diamond Jo Worth
Net revenues at DJW during the first quarter of 2010 were $21.2 million, an increase of $1.1 million from $20.1 million in the first quarter of 2009. Net revenues include casino revenues of $20.0 million, food and beverage revenues of $1.2 million, other revenues (primarily related to gasoline and merchandise sales at the convenience store located adjacent to the casino) of $1.6 million, less promotional allowances of $1.6 million. Adjusted EBITDA at DJW increased $1.0 million to $8.8 million in the first quarter of 2010 from $7.8 million in the first quarter of 2009.
An independent third party developer and operator will soon begin construction on a new 60-room hotel in close proximity to the DJW casino. Groundbreaking on the new hotel is expected to take place this month, and the hotel is expected to be completed in 2011.
Evangeline Downs Racetrack and Casino
For the first quarter of 2010, EVD's net revenues were $27.4 million, a decrease of $4.8 million from $32.2 million in the first quarter of 2009 due primarily to continued weakness in the Louisiana gaming market. Net revenues for the quarter include casino revenues of $24.0 million, racing and off-track betting revenues of $2.5 million, video poker revenues of $1.2 million, and food and beverage and other revenues of $2.6 million, less promotional allowances of $2.9 million. Adjusted EBITDA at EVD during the first quarter of 2010 was $7.9 million, a decline of $1.9 million from $9.8 million in the first quarter of 2009.
An independent third party operator is currently constructing an approximately 100-room hotel adjacent to EVD’s racino. The hotel is expected to include at least 25 suites, five meeting rooms and an indoor pool and is expected to be completed in early fourth quarter 2010. In May 2010, the Company expects to open its fifth off-track betting parlor (“OTB”) which will be located in St. Martinville Parish, Louisiana. This new OTB will offer pari-mutuel wagering and food and beverage options upon opening and expects to begin operating approximately 66 video poker games in July.
Amelia Belle Casino
On October 22, 2009, PGL acquired the Amelia Belle Casino, in Amelia, Louisiana, which is located in the south-central part of the state. For the first quarter of 2010, net revenues at ABC were $12.2 million. Net revenues for the quarter include casino revenues of $13.1 million and food and beverage and other revenues of $1.1 million, less promotional allowances of $2.0 million. Adjusted EBITDA at ABC during the first quarter of 2010 was $3.8 million.
General Corporate
General corporate Adjusted EBITDA was $(1.6) million for the first quarter of 2010, comparable with the same period in 2009.
Liquidity and Capital Resources
The Company ended the first quarter of 2010 with $21.9 million in cash and cash equivalents on hand, and $8.8 million in restricted cash. Total debt outstanding was $539.2 million. After taking into account outstanding letters of credit, the Company had $56.8 million available under its $58.5 million revolving credit facility at March 31, 2010.
During the first quarter of 2010, the Company had cash outflows of $7.8 million related to capital expenditures. Of this amount, $2.1 million related to the development of the event center and construction of a new OTB by EVD and $3.1 million related to renovations at ABC. The Company had maintenance capital expenditures at its four properties of approximately $2.6 million in the aggregate.
About Peninsula Gaming
Peninsula Gaming, through its subsidiaries, engages in the ownership and operation of casino and off-track betting parlors. It owns and operates the Diamond Jo casino in Dubuque, Iowa; the Evangeline Downs Racetrack and Casino in St. Landry Parish, Louisiana; four off-track betting parlors in Port Allen, New Iberia, Henderson, and Eunice, Louisiana; the Diamond Jo casino in Worth County, Iowa; and the Amelia Belle Casino in Amelia, Louisiana. The Company was founded in 1999 and is based in Dubuque, Iowa. The Company is a subsidiary of Peninsula Gaming Partners, LLC.
Non-GAAP Financial Measures
We define EBITDA as earnings before interest, taxes, and depreciation and amortization. We define 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 Adjusted EBITDA as the Adjusted EBITDA of the Company on a consolidated basis. We define Consolidated Property Adjusted EBITDA as the sum of Adjusted EBITDA of each of our gaming properties at EVD, DJW, DJL and ABC. 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 mana gement 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, Adjusted 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 items that affect net income, the use of these measures may vary among companies and may not be comparable to similarly titled measures of other companies.
A reconciliation of Consolidated Property Adjusted EBITDA and Consolidated Adjusted EBITDA to net income on a GAAP basis is provided at the end of this release.
FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” within the meaning of the securities laws, including statements relating to the Company’s outlook or expectations for earnings, revenues, expenses, depreciation and amortization, asset quality, cash flow measures, local economic conditions, or other future financial or business performance, strategies or expectations. The words “estimate,” “plan,” “project,” “forecast,” “expect,” “intend,” “anticipate,” “believe,” “seek,” “target,” “guidance,” “outlook” and similar expressions are intended to identify forward looking statements. These statements reflect management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, economic trends, customer behaviors, the availability of financing and overall liquidity.
Future performance cannot be ensured. Actual results may differ materially from those in the forward looking statements. Some factors that could cause actual results to differ 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 risks referenced in our Annual Report on Form 10-K, including in Part I, Item 1A, “Risk Factors”, and from time to time in our other filings with the SEC.
Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update or revise any forward-looking statements in light of new information or future events. You should not place undue reliance on any forward-looking statements, which speak only as of the date of this release. The Company is not obligated to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this news release.
Peninsula Gaming, LLC
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands)
| | | Three Months Ended March 31, 2010 | | | Three Months Ended March 31, 2009 | |
| REVENUES: | | | | | | |
| | $ | 73,919 | | | $ | 65,757 | |
| | | 2,522 | | | | 3,026 | |
| | | 1,187 | | | | 1,584 | |
| | | 6,399 | | | | 5,778 | |
| | | 2,780 | | | | 2,341 | |
Less promotional allowances | | | (8,806 | ) | | | (6,516 | ) |
| | | 78,001 | | | | 71,970 | |
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| | | 30,608 | | | | 27,390 | |
| | | 2,441 | | | | 2,884 | |
| | | 879 | | | | 1,062 | |
| | | 3,981 | | | | 4,301 | |
| | | 1,698 | | | | 1,484 | |
Selling, general and administrative | | | 13,444 | | | | 12,762 | |
Depreciation and amortization | | | 7,367 | | | | 6,065 | |
| | | 10 | | | | - | |
| | | 48 | | | | 82 | |
Affiliate management fees | | | 1,435 | | | | 1,318 | |
Loss on disposal of assets | | | 9 | | | | 81 | |
| | | 61,920 | | | | 57,429 | |
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| | | 16,081 | | | | 14,541 | |
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| | | 539 | | | | 508 | |
Interest expense, net of amounts capitalized | | | (14,855 | ) | | | (11,250 | ) |
| | | (14,316 | ) | | | (10,742 | ) |
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| | $ | 1,765 | | | $ | 3,799 | |
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 Income:
| | | Three Months Ended March 31, | |
| | | 2010 | | | 2009 | |
| Adjusted EBITDA by Property | | | | | | | | |
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Consolidated Property Adjusted EBITDA (1) | | | | | | | | |
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Consolidated Adjusted EBITDA (1) | | | | | | | | |
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Loss on disposal of assets | | | | | | | | |
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| (1) | See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA, Consolidated Adjusted EBITDA and Consolidated Property Adjusted EBITDA and more information relating to such non-GAAP financial measures. |
Contact:
Peninsula Gaming, LLC
301 Bell Street
Dubuque, Iowa 52001
Natalie A. Schramm, 563-690-4977
