Greektown Superholdings 8-K Greektown Superholdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

Greektown Superholdings 8-K

Exhibit 99.1

FOR IMMEDIATE RELEASE

April 12, 2013

Greektown Superholdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

DETROIT, April 12, 2013 – Greektown Superholdings, Inc. (“Greektown” or the “company”) today reported financial results for its fourth quarter and full year ended December 31, 2012. Financial highlights for the fourth quarter include:

·     Net revenues for the three months ended December 31, 2012 were $76.9 million compared to $83.9 million for the same quarter of 2011, a decrease of 8.4%.

·     Income from operations for the fourth quarter decreased to $8.8 million compared to $10.3 million a year ago.

·     Net loss increased to $9.5 million compared to $5.9 million a year ago, inclusive of $1.7 million of fourth quarter 2012 expense associated with the expiration of the company’s previously-announced refinancing.

·     EBITDA(1) decreased by 23.2%, to $14.4 million in the fourth quarter of 2012 from $18.8 million in the same quarter of 2011, inclusive of $1.7 million of fourth quarter 2012 expense associated with the expiration of the company’s previously-announced refinancing.

“Continuing weakness in the Detroit gaming market, among other factors, created a challenging environment for revenue growth in the fourth quarter,” said Michael Puggi, Greektown’s president and chief executive officer. “We were able, however, to partially mitigate the impact of the market decline through a 7.5% reduction of operating expenses. Furthermore, we are excited by the recent completion of several significant property improvements, which we believe will attract new guests while appealing to our existing guests.”

“These improvements include a greatly enhanced dining experience at Greektown Casino-Hotel,” continued Puggi. “In December of 2012 we opened Brizola, a fine dining restaurant conveniently located adjacent to the casino floor. For guests interested in a more casual dining experience, we opened the Market District, a collection of five distinctive outlets, in February of 2013. Together, these offerings represent fresh and exciting new dining alternatives.”

“We also opened our new, 900 space valet parking garage on February 7, 2013. This facility creates additional parking capacity, and we anticipate that its proximity to the casino floor will dramatically improve the guest experience. We believe that the new garage, as well as the numerous other property renovations made over the past eighteen months, strengthens Greektown’s competitive position.”
 

Exhibit 99.1

Year-To-Date Results

Financial highlights for the year ended December 31, 2012 include:

·     Net revenues for the twelve months ended December 31, 2012 were $331.7 million compared to $333.4 million for the same period of 2011, a decrease of 0.5%.

·     Income from operations for the twelve months ended December 31, 2012 increased to $43.6 million compared to $38.1 million a year ago.

·     Net loss decreased to $23.8 million compared to $24.9 million a year ago.

·     EBITDA decreased by 0.9%, to $73.5 million for the twelve months ended 2012 from $74.2 million in the same period of 2011.

Net loss and EBITDA for the twelve months ended December 31, 2012 included $1.7 million of expense associated with the expiration of the company’s previously-announced refinancing. Net loss for the twelve months ended December 31, 2011 included $3.8 million of deferred income tax benefit related to the repeal of the Michigan Business Tax.

Financial Position

Cash and cash equivalents were $49.4 million at December 31, 2012, compared to $50.8 million at December 31, 2011. The company’s borrowing capacity under its existing revolving credit facility was approximately $30.0 million at December 31, 2012, after consideration of $15.0 million of outstanding borrowings made in the fourth quarter of 2012 to fund construction of the new valet parking garage.

The company’s capital expenditures for the year ended December 31, 2012 were $40.3 million, including $24.1 million of spending related to the new valet parking garage, investments in new slot machines, and expenditures to introduce a new fine-dining restaurant, Brizola, and a new market-style dining venue, the Market District. Capital expenditures for the first quarter of 2013 are expected to approximate $7.5 million, including spending related to the completion of the new valet parking garage.

(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.

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Exhibit 99.1

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 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 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, 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.

Media Contact:

Greektown Superholdings, Inc.

Tony Williams

313-223-2999, ext. 5144

awilliams@greektowncasino.com

Investor Contact:

Greektown Superholdings, Inc.

Glen Tomaszewski

Senior Vice President, Chief Financial Officer and Treasurer

313-223-2999, ext. 5467

gtomaszewski@greektowncasino.com

Exhibit 99.1

 

Greektown Superholdings, Inc.

Consolidated Statements of Operation

(In thousands, except share and per share data)

	Three months ended December 31,						Twelve months ended December 31,
	2012			2011			2012			2011
Revenues
Casino	$	79,703		$	87,293		$	346,544		$	347,396
Food and beverage		5,330			5,923			22,827			23,158
Hotel		2,801			2,764			12,117			11,004
Other		1,366			1,209			5,414			4,763
Gross revenues		89,200			97,189			386,902			386,321
Less promotional allowances		12,303			13,250			55,186			52,949
Net revenues		76,897			83,939			331,716			333,372
Operating expenses
Casino		18,511			20,611			79,169			80,496
Gaming taxes		17,309			18,903			74,823			74,961
Food and beverage		3,350			4,210			15,492			18,530
Hotel		2,355			2,238			10,019			9,156
Marketing, advertising, and entertainment		2,360			2,857			7,899			8,287
Facilities		4,818			4,970			19,907			20,215
Depreciation and amortization		7,641			8,415			32,264			37,303
General and administrative expenses		11,643			11,377			48,155			46,072
Other		96			14			370			282
Operating expenses		68,083			73,595			288,098			295,302
Income from operations		8,814			10,344			43,618			38,070
Other (expenses) income
Interest expense, net		(12,674	)		(12,330	)		(50,581	)		(50,167	)
Amortization of finance fees and accretion of discount on senior notes		(1,929	)		(1,769	)		(7,540	)		(6,938	)
Refinancing expense		(1,732	)		–			(1,732	)		–
Other expense		(323	)		1			(622	)		(1,172	)
Total other expense, net		(16,658	)		(14,098	)		(60,475	)		(58,277	)
Loss before income taxes		(7,844	)		(3,754	)		(16,857	)		(20,207	)
Income tax income (expense)  – current		10			(439	)		(211	)		(1,859	)
Income tax expense - deferred		(1,682	)		(1,682	)		(6,727	)		(2,812	)
Net loss	$	(9,516	)	$	(5,875	)	$	(23,795	)	$	(24,878	)
Loss per share:
Basic	$	(90.07	)	$	(70.50	)	$	(274.64	)	$	(295.21	)
Diluted	$	(90.07	)	$	(70.50	)	$	(274.64	)	$	(295.21	)
Weighted average common shares outstanding		153,293			144,211			149,146			142,423
Weighted average common and common equivalent shares outstanding		153,293			144,211			149,146			142,423

Greektown Superholdings, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share data)

	December 31,			December 31,
	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	49,442		$	50,754
Accounts receivable – gaming, net		710			734
Accounts receivable – other, net		1,397			1,216
Inventories		458			398
Prepaid expenses		3,902			5,605
Prepaid Michigan Gaming Control Board annual fee		9,104			8,823
Prepaid municipal services fees		3,411			3,346
Deposits		1,632			1,631
Total current assets		70,056			72,507
Property, building, and equipment, net		342,417			317,085
Other assets:
Financing fees - net of accumulated amortization		8,235			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		34,500			48,300
Goodwill		110,252			110,252
Total assets	$	709,590		$	703,845
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		17,503			15,128
Accrued interest		25,125			25,063
Accrued expenses and other liabilities		9,858			9,631
Current portion of revolving credit facility		3,000			—
Total current liabilities		55,486			49,822
Long-term liabilities:
Other accrued income taxes		9,165			8,871
Revolving credit facility, less current portion		12,000			—
Senior secured notes - net		371,843			367,748
Obligation under capital lease		2,472			2,489
Deferred income taxes		16,821			10,094
Total long-term liabilities		412,301			389,202
Total liabilities		467,787			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 September 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 September 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 September 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 September 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,152,054 and 142,423 shares issued and outstanding at September 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		14,429			13,652
Accumulated deficit		(62,567	)		(38,772	)
Total shareholders' equity		241,803			264,821
Total liabilities and shareholders' equity	$	709,590		$	703,845

Greektown Superholdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

	Twelve months ended December 31,
	2012			2011
Operating activities
Net loss	$	(23,795	)	$	(24,878	)
Adjustments to reconcile net loss net cash provided by operating activities:
Depreciation and amortization		32,264			37,303
Amortization of finance fees and accretion of discount on senior notes		7,540			6,938
Deferred income taxes		6,727			2,812
Stock based compensation		777			619
Changes in current assets and liabilities:
Accounts receivable - gaming		24			(22	)
Accounts receivable - other		(181	)		608
Notes receivable		—			2,000
Property tax refund receivable		—			3,451
Inventories		(60	)		(15	)
Prepaid expenses		1,356			(1,318	)
Accounts payable		(1,121	)		3,060
Unsecured distribution liability		—			(10,000	)
Accrued interest		62			(101	)
Accrued expenses and other liabilities		503			(368	)
Net cash provided by operating activities		24,096			20,089
Investing activities
Decrease in restricted cash		—			5,000
Capital expenditures		(40,300	)		(15,661	)
Disposition of real estate		—			10,681
Redemption of certificate of deposit		—			534
Net cash (used in) provided by investing activities		(40,300	)		554
Financing activities
Borrowings under revolving credit facility		15,000			—
Financing fees paid		(108	)		(84	)
Net cash provided by (used in) financing activities		14,892			(84	)
Net (decrease) increase in cash and cash equivalents		(1,312	)		20,559
Cash and cash equivalents at beginning of period		50,754			30,195
Cash and cash equivalents at end of period	$	49,442		$	50,754
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	50,210		$	50,754
Cash paid during the period for income taxes	$	—		$	2,288

Reconciliation of Net Loss to EBITDA (1)

(In thousands)

	Three months ended December 31,						Twelve months ended December 31,
	2012			2011			2012			2011
Net loss	$	(9,516	)	$	(5,875	)	$	(23,795	)	$	(24,878	)
Other expense		14,603			14,099			58,121			57,105
Income tax expense		1,672			2,121			6,938			4,671
Depreciation and amortization		7,641			8,415			32,264			37,303
EBITDA (1)	$	14,400		$	18,760		$	73,528		$	74,201

(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.