Exhibit 99.1
FOR IMMEDIATE RELEASE
November 8, 2013
Greektown Superholdings, Inc. Reports Third Quarter 2013 Financial Results
DETROIT, November 8, 2013 – Greektown Superholdings, Inc. (“Greektown” or the “Company”) today reported financial results for its third quarter ended September 30, 2013. Financial highlights for the third quarter include:
· | Net revenues for the three months ended September 30, 2013 were $73.5 million compared to $79.5 million for the same quarter of 2012, a decrease of 7.6%. |
· | Income from operations for the third quarter decreased to $5.6 million compared to $9.8 million a year ago. |
· | Net loss attributable to Greektown Superholdings, Inc. decreased to $5.9 million compared to $6.7 million a year ago. |
· | EBITDA(1) decreased to $11.6 million in the third quarter of 2013 from $17.1 million in the same quarter of 2012. EBITDA for the third quarter of 2013 included approximately $0.8 million of costs related to the Company’s ownership transition. |
Due to the significance of the ownership interest in Greektown acquired by Athens Acquisition LLC in April 2013, Greektown’s assets and liabilities were revalued based on their fair values, effective as of April 1, 2013. Accordingly, a new basis of accounting has been established and, for accounting purposes, the old entity (referred to as the “Predecessor” in the accompanying financial statements) has been terminated and a new entity (referred to as the “Successor”) has been created. In addition, the revaluation of assets and liabilities resulted in reduced depreciation and amortization expense and other non-operating expenses and a premium on the Senior Secured Notes.
(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. Not all companies 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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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 Brizola, The Market District, 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 opened a new 900 space valet parking garage in February 2013. 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.
John Truscott
517-485-9320
jtruscott@truscottrossman.com
Investor Contact:
Greektown Superholdings, Inc.
Glen Tomaszewski
Senior Vice President, Chief Financial Officer and Treasurer
313-223-2999, ext. 5467
gtomaszewski@greektowncasino.com
Greektown Superholdings, Inc. | ||||||
Consolidated Statements of Operations (unaudited) | ||||||
(In Thousands, except share and per share data) |
Successor | Predecessor | Successor | Predecessor | |||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended March 31, | Nine Months Ended Septebmer 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2013 | 2012 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Casino | $ | 77,209 | $ | 83,612 | $ | 162,452 | $ | 85,613 | $ | 266,841 | ||||||||||
Food and beverage | 5,569 | 5,232 | 11,763 | 5,939 | 17,497 | |||||||||||||||
Hotel | 3,275 | 3,257 | 6,686 | 3,070 | 9,317 | |||||||||||||||
Other | 1,660 | 1,350 | 3,184 | 1,491 | 4,048 | |||||||||||||||
Gross revenues | 87,713 | 93,451 | 184,085 | 96,113 | 297,703 | |||||||||||||||
Less promotional allowances | 14,236 | 13,999 | 30,906 | 15,035 | 42,883 | |||||||||||||||
Net revenues | 73,477 | 79,452 | 153,179 | 81,078 | 254,820 | |||||||||||||||
Operating expenses | ||||||||||||||||||||
Casino | 18,546 | 19,228 | 37,573 | 19,649 | 60,658 | |||||||||||||||
Gaming taxes | 16,683 | 18,071 | 35,071 | 18,552 | 57,515 | |||||||||||||||
Food and beverage | 4,113 | 3,377 | 8,374 | 4,287 | 12,142 | |||||||||||||||
Hotel | 2,689 | 2,555 | 5,321 | 2,685 | 7,665 | |||||||||||||||
Marketing, advertising, and entertainment | 2,294 | 1,746 | 4,556 | 2,014 | 5,540 | |||||||||||||||
Facilities | 5,186 | 4,982 | 10,344 | 5,389 | 15,089 | |||||||||||||||
Depreciation and amortization | 6,142 | 7,443 | 12,500 | 7,595 | 24,623 | |||||||||||||||
General and administrative expenses | 11,297 | 12,122 | 24,357 | 12,036 | 36,512 | |||||||||||||||
Ownership transition expenses | 777 | — | 1,673 | 2,964 | — | |||||||||||||||
Other | 168 | 112 | 311 | 131 | 275 | |||||||||||||||
Operating expenses | 67,895 | 69,636 | 140,080 | 75,302 | 220,019 | |||||||||||||||
Income from operations | 5,582 | 9,816 | 13,099 | 5,776 | 34,801 | |||||||||||||||
Other income/(expenses) | ||||||||||||||||||||
Interest expense, net | (12,727 | ) | (12,657 | ) | (25,456 | ) | (12,755 | ) | (37,908 | ) | ||||||||||
Amortization of finance fees and accretion of premium/discount on senior notes | 2,786 | (1,929 | ) | 5,506 | (2,007 | ) | (5,610 | ) | ||||||||||||
Refinancing expense | — | — | (157 | ) | (235 | ) | — | |||||||||||||
Other (expense) income | (112 | ) | (209 | ) | 155 | (188 | ) | (298 | ) | |||||||||||
Total other expense, net | (10,053 | ) | (14,795 | ) | (19,952 | ) | (15,185 | ) | (43,816 | ) | ||||||||||
Loss before provisions for income taxes | (4,471 | ) | (4,979 | ) | (6,853 | ) | (9,409 | ) | (9,015 | ) | ||||||||||
Income tax expense – current | (74 | ) | (74 | ) | (148 | ) | (64 | ) | (220 | ) | ||||||||||
Income tax expense – deferred | (1,499 | ) | (1,682 | ) | (2,998 | ) | (1,682 | ) | (5,046 | ) | ||||||||||
Net loss | $ | (6,044 | ) | $ | (6,735 | ) | $ | (9,999 | ) | $ | (11,155 | ) | $ | (14,281 | ) | |||||
Net loss attributable to noncontrolling interest | (145 | ) | — | (835 | ) | — | — | |||||||||||||
Net loss attributable to Greektown Superholdings, Inc. | $ | (5,899 | ) | $ | (6,735 | ) | $ | (9,164 | ) | $ | (11,155 | ) | $ | (14,281 | ) | |||||
Loss per share attributable to Greektown Superholdings, Inc.: | ||||||||||||||||||||
Basic | $ | (60.38 | ) | $ | (72.68 | ) | $ | (105.16 | ) | $ | (100.10 | ) | $ | (183.78 | ) | |||||
Diluted | $ | (60.38 | ) | $ | (72.68 | ) | $ | (105.16 | ) | $ | (100.10 | ) | $ | (183.78 | ) | |||||
Weighted average common shares outstanding | 168,770 | 151,716 | 168,770 | 154,312 | 147,763 | |||||||||||||||
Weighted average common and common equivalent shares outstanding | 168,770 | 151,716 | 168,770 | 154,312 | 147,763 |
Greektown Superholdings, Inc. | ||
Consolidated Balance Sheets | ||
(In Thousands, except share and per share data) |
Successor | Predecessor | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 34,975 | $ | 49,442 | ||||
Accounts receivable – gaming, net | 686 | 710 | ||||||
Accounts receivable – other, net | 1,321 | 1,397 | ||||||
Inventories | 448 | 458 | ||||||
Prepaid expenses | 5,474 | 3,902 | ||||||
Prepaid Michigan Gaming Control Board annual fee | 1,160 | 9,104 | ||||||
Prepaid municipal services fees | 226 | 3,411 | ||||||
Deposits | 881 | 1,632 | ||||||
Total current assets | 45,171 | 70,056 | ||||||
Property, building, and equipment, net | 339,583 | 342,417 | ||||||
Other assets: | ||||||||
Financing fees - net of accumulated amortization | — | 8,235 | ||||||
Deposits and other assets | 30 | 30 | ||||||
Casino development rights | 185,700 | 117,800 | ||||||
Trade names | 13,230 | 26,300 | ||||||
Rated player relationships - net of accumulated amortization | 16,470 | 34,500 | ||||||
Goodwill | 117,107 | 110,252 | ||||||
Total assets | $ | 717,291 | $ | 709,590 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | 8,071 | 17,503 | ||||||
Accrued interest | 12,672 | 25,125 | ||||||
Accrued expenses and other liabilities | 10,303 | 9,858 | ||||||
Current portion of revolving credit facility | 3,000 | 3,000 | ||||||
Total current liabilities | 34,046 | 55,486 | ||||||
Long-term liabilities: | ||||||||
Other accrued income taxes | 9,386 | 9,165 | ||||||
Leasehold liability | 1,940 | — | ||||||
Revolving credit facility, less current portion | 10,500 | 12,000 | ||||||
Senior secured notes - net | 406,444 | 371,843 | ||||||
Obligation under capital lease | 4,725 | 2,472 | ||||||
Deferred income taxes | 39,692 | 16,821 | ||||||
Total long-term liabilities | 472,687 | 412,301 | ||||||
Total liabilities | 506,733 | 467,787 | ||||||
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, 2013 and December 31, 2012 | 131,718 | 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, 2013 and December 31, 2012 | 14,603 | 20,551 | ||||||
Series A-1 preferred warrants at $0.01 par value; | ||||||||
202,511 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 18,226 | 25,651 | ||||||
Series A-2 preferred warrants at $0.01 par value; | ||||||||
460,587 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 41,453 | 58,342 | ||||||
Series A-1 common stock at $0.01 par value; | ||||||||
4,354,935 shares authorized, 152,054 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 1 | 1 | ||||||
Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued | — | — | ||||||
Additional paid-in capital | 10,275 | 14,429 | ||||||
Accumulated deficit | (9,163 | ) | (62,567 | ) | ||||
Total Greektown Superholdings, Inc. shareholders' equity | 207,113 | 241,803 | ||||||
Noncontrolling interest | 3,445 | — | ||||||
Total shareholders' equity | 210,558 | 241,803 | ||||||
Total liabilities and shareholders' equity | $ | 717,291 | $ | 709,590 |
Greektown Superholdings, Inc. | |||
Consolidated Statements of Cash Flows (unaudited) | |||
(In Thousands) |
Successor | Predecessor | |||||||||||
Six Months Ended September 30, | Three Months Ended March 31, | Nine Months Ended September 30, | ||||||||||
2013 | 2013 | 2012 | ||||||||||
Operating activities | ||||||||||||
Net loss | $ | (9,999 | ) | $ | (11,155 | ) | $ | (14,281 | ) | |||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||
Depreciation and amortization | 12,500 | 7,595 | 24,623 | |||||||||
Amortization of finance fees and accretion of (premium) discount on senior notes | (5,506 | ) | 2,007 | 5,610 | ||||||||
Deferred income taxes | 2,998 | 1,682 | 5,046 | |||||||||
Stock based compensation | 871 | 198 | 589 | |||||||||
Changes in current assets and liabilities: | ||||||||||||
Accounts receivable - gaming | (66 | ) | 90 | (56 | ) | |||||||
Accounts receivable - other | 341 | (265 | ) | (618 | ) | |||||||
Inventories | (11 | ) | 21 | 60 | ||||||||
Prepaid expenses | 8,092 | 1,465 | 9,548 | |||||||||
Deposits | 751 | — | (1 | ) | ||||||||
Accounts payable | (6,629 | ) | (2,803 | ) | 2,732 | |||||||
Accrued interest | (6 | ) | (12,447 | ) | (12,466 | ) | ||||||
Accrued expenses and other liabilities | (4,167 | ) | 10,106 | (4,585 | ) | |||||||
Net cash (used in) provided by operating activities | (831 | ) | (3,506 | ) | 16,201 | |||||||
Investing activities | ||||||||||||
Capital expenditures | (1,101 | ) | (7,529 | ) | (22,347 | ) | ||||||
Net cash used in investing activities | (1,101 | ) | (7,529 | ) | (22,347 | ) | ||||||
Financing activities | ||||||||||||
Payments on revolving credit facility | (1,500 | ) | — | — | ||||||||
Financing fees paid | — | — | (108 | ) | ||||||||
Net cash used in financing activities | (1,500 | ) | — | (108 | ) | |||||||
Net decrease in cash and cash equivalents | (3,432 | ) | (11,035 | ) | (6,254 | ) | ||||||
Cash and cash equivalents at beginning of period | 38,407 | 49,442 | 50,754 | |||||||||
Cash and cash equivalents at end of period | $ | 34,975 | $ | 38,407 | $ | 44,500 | ||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash paid during the period for interest | $ | 25,354 | $ | 25,126 | $ | 50,268 | ||||||
Cash paid during the period for income taxes | $ | — | $ | — | $ | — |
Greektown Superholdings, Inc. | ||||||
Reconciliation of Net Loss to EBITDA(1) | ||||||
(In Thousands) |
Successor | Predecessor | Successor | Predecessor | |||||||||||||||||
Three months ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | Three months ended March 31, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2013 | 2012 | ||||||||||||||||
Net loss | $ | (6,044 | ) | $ | (6,735 | ) | $ | (9,999 | ) | $ | (11,155 | ) | $ | (14,281 | ) | |||||
Interest expense | 9,941 | 14,586 | 19,950 | 14,762 | 43,518 | |||||||||||||||
Income tax expense | 1,573 | 1,756 | 3,146 | 1,746 | 5,266 | |||||||||||||||
Depreciation and amortization | 6,142 | 7,443 | 12,500 | 7,595 | 24,623 | |||||||||||||||
EBITDA (1) | $ | 11,612 | $ | 17,050 | $ | 25,597 | $ | 12,948 | $ | 59,126 |
(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. Not all companies 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.