Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 08, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TWIN RIVER WORLDWIDE HOLDINGS, INC. | |
Entity Central Index Key | 0001747079 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,130,922 | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 103,002 | $ 77,580 |
Restricted cash | 9,698 | 3,851 |
Accounts receivable, net | 32,050 | 22,966 |
Inventory | 8,587 | 6,418 |
Prepaid expenses and other assets | 10,978 | 11,647 |
Total current assets | 164,315 | 122,462 |
Property and equipment, net | 521,735 | 416,148 |
Right of use assets, net | 18,350 | 0 |
Goodwill | 132,035 | 132,035 |
Intangible assets, net | 113,848 | 110,104 |
Other assets | 793 | 1,603 |
Total assets | 951,076 | 782,352 |
Liabilities and Shareholders’ Equity | ||
Current portion of long-term debt | 83,595 | 3,595 |
Current portion of lease obligations | 1,154 | 0 |
Accounts payable | 23,969 | 14,215 |
Accrued liabilities | 67,659 | 57,778 |
Total current liabilities | 176,377 | 75,588 |
Lease obligations, net of current portion | 17,184 | 0 |
Pension benefit obligations | 6,613 | 0 |
Deferred tax liability | 10,871 | 17,526 |
Long-term debt, net of current portion | 334,920 | 390,578 |
Other long-term liabilities | 2,332 | 0 |
Total liabilities | 548,297 | 483,692 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, par value $0.01; 100,000,000 shares authorized; 41,128,181 and 39,421,356 shares issued as of March 31, 2019 and December 31, 2018, respectively; 41,111,841 and 37,989,376 shares outstanding as of March 31, 2019 and December 31, 2018, respectively, net of treasury stock. | 411 | 380 |
Additional paid in capital | 182,297 | 125,629 |
Treasury stock, at cost, 16,340 and 1,431,980 shares as of March 31, 2019 and December 31, 2018, respectively. | (409) | (30,233) |
Retained earnings | 220,480 | 202,884 |
Total shareholders’ equity | 402,779 | 298,660 |
Total liabilities and shareholders’ equity | $ 951,076 | $ 782,352 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 41,128,181 | 39,421,356 |
Common stock outstanding (in shares) | 41,111,841 | 37,989,376 |
Treasury stock (in shares) | 16,340 | 1,431,980 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Net revenue | $ 120,631 | $ 104,806 |
Operating costs and expenses: | ||
Advertising, general and administrative | 46,467 | 39,160 |
Expansion and pre-opening | 0 | 34 |
Newport Grand disposal loss | 0 | 5,885 |
Depreciation and amortization | 6,769 | 5,212 |
Total operating costs and expenses | 90,324 | 79,929 |
Income from operations | 30,307 | 24,877 |
Other income (expense): | ||
Interest income | 13 | 40 |
Interest expense, net of amounts capitalized | (7,051) | (5,739) |
Total other expense, net | (7,038) | (5,699) |
Income before provision for income taxes | 23,269 | 19,178 |
Provision for income taxes | 5,673 | 6,544 |
Net income | 17,596 | 12,634 |
Comprehensive income | 17,596 | 12,634 |
Deemed dividends related to changes in fair value of common stock subject to possible redemption | 0 | (1,305) |
Net income applicable to common stockholders | $ 17,596 | $ 11,329 |
Net income per share, basic (in dollars per share) | $ 0.46 | $ 0.31 |
Weighted average common shares outstanding, basic (in shares) | 38,248 | 36,823 |
Net income per share, diluted (in dollars per share) | $ 0.46 | $ 0.29 |
Weighted average common shares outstanding, diluted (in shares) | 38,367 | 38,405 |
Gaming | ||
Revenue: | ||
Net revenue | $ 90,868 | $ 79,582 |
Operating costs and expenses: | ||
Cost of net revenue | 21,076 | 16,727 |
Racing | ||
Revenue: | ||
Net revenue | 2,940 | 3,284 |
Operating costs and expenses: | ||
Cost of net revenue | 2,191 | 2,179 |
Hotel | ||
Revenue: | ||
Net revenue | 6,305 | 4,454 |
Operating costs and expenses: | ||
Cost of net revenue | 2,714 | 1,760 |
Food and beverage | ||
Revenue: | ||
Net revenue | 13,511 | 11,488 |
Operating costs and expenses: | ||
Cost of net revenue | 11,107 | 8,972 |
Other | ||
Revenue: | ||
Net revenue | $ 7,007 | $ 5,998 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2017 | 36,199,704 | ||||
Beginning balance at Dec. 31, 2017 | $ 176,803 | $ 362 | $ 67,910 | $ (22,275) | $ 130,806 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock options exercised via repayment of non-recourse notes (in shares) | 368,000 | ||||
Stock options exercised via repayment of non-recourse notes | 9,020 | $ 4 | 9,016 | ||
Release of restricted units (in shares) | 25,136 | ||||
Share-based compensation - equity awards | 506 | 506 | |||
Common stock subject to possible redemption (in shares) | (25,136) | ||||
Common stock subject to possible redemption | (685) | (685) | |||
Deemed dividends related to changes in fair value of common stock subject to possible redemption | (1,305) | (1,305) | |||
Net income | 12,634 | 12,634 | |||
Ending balance (in shares) at Mar. 31, 2018 | 36,567,704 | ||||
Ending balance at Mar. 31, 2018 | 196,973 | $ 366 | 76,747 | (22,275) | 142,135 |
Beginning balance (in shares) at Dec. 31, 2018 | 37,989,376 | ||||
Beginning balance at Dec. 31, 2018 | 298,660 | $ 380 | 125,629 | (30,233) | 202,884 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Release of restricted units (in shares) | 161,980 | ||||
Release of restricted units | 1 | $ 1 | |||
Share-based compensation - equity awards | 151 | 151 | |||
Retirement of treasury shares | $ 0 | (30,233) | 30,233 | ||
Share repurchases (in shares) | (16,340) | (16,340) | |||
Share repurchases | $ (409) | (409) | |||
Stock issued for purchase of Dover Downs (in shares) | 2,976,825 | ||||
Stock issued for purchase of Dover Downs | 86,780 | $ 30 | 86,750 | ||
Net income | 17,596 | 17,596 | |||
Ending balance (in shares) at Mar. 31, 2019 | 41,111,841 | ||||
Ending balance at Mar. 31, 2019 | $ 402,779 | $ 411 | $ 182,297 | $ (409) | $ 220,480 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 17,596 | $ 12,634 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property and equipment | 5,402 | 3,841 |
Amortization of intangible assets | 1,367 | 1,371 |
Amortization of right of use assets | 482 | 0 |
Share-based compensation - liability awards | 0 | 4,512 |
Share-based compensation - equity awards | 151 | 506 |
Amortization of deferred financing fees | 521 | 857 |
Amortization of original issue discount | 171 | 344 |
Bad debt expense | 22 | 45 |
Deferred income taxes | 0 | 452 |
Newport Grand disposal loss | 0 | 5,885 |
Gain on disposal of property and equipment | (2) | (5) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,432) | (1,991) |
Inventory | (278) | 557 |
Prepaid expenses and other assets | 5,791 | 2,852 |
Accounts payable | 4,789 | (1,039) |
Accrued liabilities | (7,103) | (2,006) |
Lease obligations | (494) | 0 |
Net cash provided by operating activities | 24,983 | 28,815 |
Cash flows from investing activities: | ||
Repayment of loans from officers and directors | 0 | 1,073 |
Acquisition of Dover Downs Gaming & Entertainment, Inc., net of cash acquired | (9,606) | 0 |
Capital expenditures, excluding Tiverton Casino Hotel and new hotel at Twin River Casino | (4,212) | (1,988) |
Capital expenditures - Tiverton Casino Hotel | (1,277) | (31,386) |
Capital expenditures - new hotel at Twin River Casino | (2,010) | (9,136) |
Payments associated with gaming license | 0 | (29) |
Net cash used in investing activities | (17,105) | (41,466) |
Cash flows from financing activities: | ||
Revolver borrowings | 25,000 | 20,000 |
Term loan repayments | (1,200) | (30,927) |
Stock repurchases | (409) | 0 |
Stock options exercised via repayment of non-recourse notes | 0 | 889 |
Net cash provided by (used in) financing activities | 23,391 | (10,038) |
Net change in cash and cash equivalents and restricted cash | 31,269 | (22,689) |
Cash and cash equivalents and restricted cash, beginning of period | 81,431 | 93,216 |
Cash and cash equivalents and restricted cash, end of period | 112,700 | 70,527 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,286 | 5,255 |
Cash paid for income taxes | 0 | 53 |
Non-cash investing and financing activities: | ||
Unpaid property and equipment | 5,928 | 13,011 |
Deposit applied to fixed asset purchases | 981 | 0 |
Deemed dividends related to changes in fair value of common stock subject to possible redemption | 0 | 1,305 |
Termination of operating leases via purchase of underlying assets | 1,272 | 0 |
Stock issued for acquisition of Dover Downs Gaming & Entertainment, Inc. | $ 86,780 | $ 0 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Nature of Business Twin River Worldwide Holdings, Inc. (the “Company”, “TRWH”) is a diverse, multi-jurisdictional owner and operator of gaming and racing facilities, including slot machines and various casino table games. The Company, through its wholly owned subsidiary Twin River Management Group, Inc. (“TRMG”), owns and manages the Twin River Casino Hotel (“Twin River Casino Hotel”) in Lincoln, Rhode Island, the Tiverton Casino Hotel (“Tiverton Casino Hotel”) in Tiverton, Rhode Island, the Hard Rock Hotel & Casino (“Hard Rock Biloxi”) in Biloxi, Mississippi, the Dover Downs Hotel & Casino (“Dover Downs Casino Hotel”) in Dover, Delaware, and the Arapahoe Park racetrack and Havana Park off-track betting (“Mile High USA”) in Aurora, Colorado. Following the closure of the Newport Grand Casino (“Newport Grand”) in August 2018, we opened the Tiverton Casino Hotel on September 1, 2018. On March 28, 2019, we completed our acquisition of Dover Downs Gaming & Entertainment, Inc., which consisted of Dover Downs Casino Hotel, collectively (“Dover Downs”) and on January 29, 2019, the Company entered into an agreement to acquire three casino properties in Black Hawk, Colorado; See Note 4 .“Acquisitions” for further information. On March 29, 2019, the Company’s common stock was listed on the New York Stock Exchange and began trading under the ticker symbol “TRWH.” Principles of Consolidation The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary TRMG and its subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year or any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Except as described below and in the Notes to the condensed consolidated financial statements, there were no material changes in significant accounting policies from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Stock Dividend On January 18, 2019, the Board of Directors of the Company approved a common stock dividend, accounted for as a stock split. The stock split was effected through a stock dividend of three shares for each share outstanding as of the approval date. The effect of this dividend has been retroactively applied to the condensed consolidated financial statements as of and for the period ended December 31, 2018 and resulted in an increase to the number of shares of common stock outstanding as of December 31, 2018 from 9,855,339 to 39,421,356 . All share and per share information included in the condensed consolidated financial statements has been retroactively adjusted to reflect the impact of the stock dividend. The shares of common stock authorized remained at 100 million , and the shares retained a par value per share of $0.01 . Cash and Cash Equivalents and Restricted Cash The Company considers all cash balances and highly liquid investments with an original maturity of three months or less to be cash equivalents. As of March 31, 2019 and December 31, 2018 , restricted cash of $9.7 million and $3.9 million , respectively, was comprised of video lottery terminal (“VLT”) and table games cash payable to the State of Rhode Island which is unavailable for the Company’s use. The following table reconciles cash and restricted cash in the condensed consolidated balance sheets to the total shown on the condensed consolidated statements of cash flows. March 31, December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 103,002 $ 77,580 Restricted cash 9,698 3,851 Total cash and cash equivalents and restricted cash $ 112,700 $ 81,431 Treasury Stock The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. The Company retired 1,431,980 shares of its common stock held in treasury during the three months ended March 31, 2019. The shares were returned to the status of authorized but unissued. The Company repurchased 16,340 shares of its common stock at an aggregate cost of $0.4 million during the three months ended March 31, 2019. Fair Value Measurements Fair value is determined using the principles of ASC 820, Fair Value Measurement . Fair value is described as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows: • Level 1: Observable quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs are observable for the asset or liability either directly or through corroboration with observable market data. • Level 3: Unobservable inputs. The Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company’s term loans and revolving credit facilities, including the current portion, approximate fair value as the terms and conditions of these loans are consistent with comparable market debt issuances. These measurements fall within Level 2 of the fair value hierarchy. The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement. There were no transfers made among the three levels in the fair value hierarchy for the three months ended March 31, 2019 . Leases Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases . Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Discount rates used to determine the present value of the lease payments are based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use asset and lease liability, the Company accounts for both the lease component and the non-lease component as a single component for all classes of underlying assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company also has leasing arrangements with third-party lessees at its properties. Leasing arrangements for which the Company acts as a lessor are not deemed to be material as of March 31, 2019. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. See Note 8 . “Leases” for further discussion. |
RECENTLY ADOPTED AND ISSUED ACC
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by, among other provisions, recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous United States Generally Accepted Accounting Principles (“US GAAP”). For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods, which for the Company was the first quarter of 2019) using a modified retrospective approach and early adoption is permitted. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the adoption date, unless the lease is modified, and permits entities to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, as of the adoption date, which effectively allows entities to carryforward accounting conclusions under previous U.S. GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides entities an optional transition method to apply the guidance under Topic 842 as of the adoption date, rather than as of the earliest period presented. The Company adopted Topic 842 on January 1, 2019, using the optional transition method to apply the new guidance as of January 1, 2019, rather than as of the earliest period presented, and elected the entire package of practical expedients described above. Based on the analysis, on January 1, 2019, the Company recorded right of use assets and a corresponding lease liability of approximately $18.8 million . There was no impact to opening retained earnings. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which changes the recognition and presentation requirements of hedge accounting, including eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line item as the hedged item. The ASU also provides new alternatives for applying hedge accounting to additional hedging strategies, measuring the hedged item in fair value hedges of interest rate risk, reducing the cost and complexity of applying hedge accounting by easing the requirements for effectiveness testing, hedge documentation and application of the critical terms match method and reducing the risk of a material error correction if a company applies the shortcut method inappropriately. This ASU is effective for public companies in fiscal years beginning after December 15, 2018, which for the Company was the first quarter of 2019. The Company adopted the guidance in this ASU in the first quarter of 2019, with no impact to its condensed consolidated financial statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments . This standard amends several aspects of the measurement of credit losses on financial instruments, including trade receivables. The standard replaces the existing incurred credit loss model with the Current Expected Credit Losses (“CECL”) model and amends certain aspects of accounting for purchased financial assets with deterioration in credit quality since origination. Under CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of the financial assets, based on historical experience, current conditions and forecasts that affect the collectability of the reported amount. The standard is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for annual and interim periods beginning after December 15, 2018. Adoption is through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (a modified-retrospective approach). The impact of adoption on the Company’s consolidated financial statements will depend on, among other things, the economic environment and the type of financial assets held on the date of adoption. In August 2018, the FASB issued ASU No 2018-14, Compensation –Retirement Benefits – Defined Benefit Plans – General . This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020 with early adoption allowed. The Company anticipates adopting this amendment during the first quarter of 2021, and does not expect it to have a significant impact on the condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820),—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company accounts for revenue earned from contracts with customers under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The Company generates revenue from five principal sources: gaming services, hotel, racing, food and beverage and other. Gaming revenue includes Twin River Casino Hotel’s, Tiverton Casino Hotel’s (upon its opening on September 1, 2018) and Newport Grand’s (until its closing on August 28, 2018) share of VLT revenue as determined by their respective master VLT contracts with the State of Rhode Island. Twin River Casino Hotel is entitled to a 28.85% share of VLT revenue on the initial 3,002 units and a 26.00% share of VLT revenue generated from units in excess of 3,002 units. Tiverton Casino Hotel is (and Newport Grand was) entitled to receive a percentage of VLT revenue that is equivalent to the percentage received by Twin River Casino Hotel. Gaming revenue also includes Twin River Casino Hotel’s and Tiverton Casino Hotel’s share of table games revenue. Twin River Casino Hotel and Tiverton Casino Hotel were, as of March 31, 2019 , entitled to an 83.5% share of table games revenue. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Rhode Island operations on a net basis which is the percentage share of VLT revenue received as the Company acts as an agent in operating the gaming service on behalf of the State of Rhode Island. Gaming revenue includes Dover Downs’ share of revenue as determined under the Delaware State Lottery Code from the date of acquisition. Dover Downs is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code. Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement. As of March 31, 2019, Dover Downs was entitled to an approximately 42% share of VLT revenue and an 80% share of table games revenue. Revenue is recognized when the wager is complete, which is when the customer has received the benefits of the Company’s gaming services and the Company has a present right to payment. The Company records revenue from its Delaware operations on a net basis which is the percentage share of VLT and table games revenue received as the Company acts as an agent in operating the gaming service on behalf of the State of Delaware. Gaming revenue also includes Hard Rock Biloxi’s casino revenue, which is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs, for chips outstanding and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of credits played, are charged to revenue as the amount of the progressive jackpots increase. Gaming services contracts have two performance obligations for those customers earning incentives under the Company’s player loyalty programs and a single performance obligation for customers who do not participate in the programs. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as such wagers have similar characteristics and the Company reasonably expects the effects on the condensed consolidated financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with incentives earned under loyalty programs, the Company allocates an amount to the loyalty program contract liability based on the stand-alone selling price of the incentives earned for a hotel room stay, food and beverage or other amenities. The performance obligations for the incentives earned under the loyalty programs are deferred and recognized as revenue when the customer redeems the incentive. When redeemed, revenue is recognized in the department that provides the goods or service. After allocating revenue to other goods and services provided as part of casino wager contracts, the Company records the residual amount to gaming revenue as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur as all such wagers settle immediately. The estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, (in thousands) 2019 2018 Hotel $ 3,558 $ 2,533 Food and beverage 5,790 5,563 Other 1,378 1,062 $ 10,726 $ 9,158 Racing revenue includes Twin River Casino Hotel’s, Tiverton Casino Hotel’s (upon its opening on September 1, 2018), Newport Grand’s (until its closing on August 28, 2018), Mile High USA’s and Dover Downs’ share of wagering from live racing and the import of simulcast signals. Racing revenue is recognized when the wager is complete based on an established take-out percentage. The Company functions as an agent to the pari-mutuel pool. Therefore, fees and obligations related to the Company’s share of purse funding, simulcasting fees, tote fees, pari-mutuel taxes, and other fees directly related to the Company’s racing operations are reported on a net basis and included as a deduction to racing revenue. Hotel revenue is recognized at the time of occupancy, which is when the customer obtains control through occupancy of the room. Advance deposits for hotel rooms are recorded as liabilities until revenue recognition criteria are met. Food and beverage revenue are recognized at the time the goods are sold from Company-operated outlets. All other revenues are recognized at the time the goods are sold or the service is provided. Sales tax and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in net revenue or operating expenses. The following table provides a disaggregation of net revenue by segment: (in thousands) Rhode Island Delaware Biloxi Other Total Three Months Ended March 31, 2019 Gaming $ 68,839 $ 969 $ 21,060 $ — $ 90,868 Racing 992 27 — 1,921 2,940 Hotel 1,541 144 4,620 — 6,305 Food and beverage 9,092 350 4,069 — 13,511 Other 5,661 35 1,283 28 7,007 Net revenue $ 86,125 $ 1,525 $ 31,032 $ 1,949 $ 120,631 Three Months Ended March 31, 2018 Gaming $ 59,443 n/a $ 20,139 $ — $ 79,582 Racing 872 n/a — 2,412 3,284 Hotel — n/a 4,454 — 4,454 Food and beverage 7,290 n/a 4,197 1 11,488 Other 4,769 n/a 1,218 11 5,998 Net revenue $ 72,374 n/a $ 30,008 $ 2,424 $ 104,806 Net revenue reported for the Delaware segment reflect Dover Downs’ results from the date of acquisition, March 28, 2019, through March 31, 2019. Refer to Note 4 . “Acquisitions” for further information. The Company’s receivables related to contracts with customers are primarily comprised of marker balances and other amounts due from gaming activities, amounts due for hotel stays, and amounts due from tracks and off track betting (“OTB”) locations. The Company’s receivables related to contracts with customers were $17.1 million and $13.3 million as of March 31, 2019 and December 31, 2018 , respectively. The Company has the following liabilities related to contracts with customers: liabilities for loyalty programs, deposits made in advance for goods and services yet to be provided, and unpaid wagers. All of the contract liabilities are short term in nature. Loyalty program incentives earned by customers are typically redeemed within one year from when they are earned and expire if a customer’s account is inactive for more than twelve months; therefore, the majority of these incentives outstanding at the end of a period will either be redeemed or expire within the next twelve months. The Company’s contract liabilities related to loyalty programs were $11.0 million , and $9.5 million as of March 31, 2019 and December 31, 2018 , respectively, and are included as accrued liabilities in the condensed consolidated balance sheets. The Company recognized $2.3 million and $2.0 million of revenue related to loyalty program redemptions for the three months ended March 31, 2019 and 2018 , respectively. Advance deposits are typically for future banquet events and to reserve hotel rooms. These deposits are usually received weeks or months in advance of the event or hotel stay. The Company’s contract liabilities related to deposits from customers were $2.4 million and $0.6 million as of March 31, 2019 and December 31, 2018 , respectively, and are included as accrued liabilities in the condensed consolidated balance sheets. Unpaid wagers include unpaid pari-mutuel tickets and unpaid sports bet tickets. Unpaid pari-mutual tickets not claimed within twelve months by the customer who earned them are escheated to the state. The Company’s contract liabilities related to unpaid wagers were $0.9 million as of March 31, 2019 and December 31, 2018 and are included as accrued liabilities in the condensed consolidated balance sheets. Topic 606 requires complimentary items to be considered a separate performance obligation, which requires the Company to allocate a portion of revenue from a gaming transaction to other operating revenue based on the estimated standalone selling prices of the promotional items provided. For example, when a casino customer is given a complimentary room, the Company is required to allocate a portion of the casino revenue earned from the customer to hotel revenue based on the estimated standalone selling price of the hotel room. The estimated standalone selling price of hotel rooms is determined based on observable prices. The standalone selling price of food and beverage, and other miscellaneous goods and services is determined based upon the actual retail prices charged customers for those items. Revenue is recognized in the period the goods or services are provided. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Dover Downs Gaming & Entertainment, Inc. On July 22, 2018, the Company entered into a merger agreement with Dover Downs pursuant to which, among other things, a subsidiary of the Company merged with and into Dover Downs with Dover Downs becoming an indirect wholly-owned subsidiary of the Company as the merger was consummated on March 28, 2019. The merger resulted in Dover Downs’ shareholders exchanging their Dover Downs stock for Company common shares representing 7.225% of the outstanding shares of common stock in the combined company at closing. A total of 2,976,825 shares of common stock were issued at the transaction closing on March 28, 2019 and the valuation of those shares was based on the closing price of Dover Downs’ common stock on March 27, 2019. (in thousands, except share and per share data) March 28, 2019 Dover Downs shares outstanding 33,125,997 Closing Dover Downs share price on March 27, 2019 $ 2.62 Total fair value of stock purchased * $ 86,790 Cash paid by the Company at closing, including amounts to retire Dover Downs debt, inclusive of accrued interest $ 29,096 Consideration transferred $ 115,886 *Shares issued at approximately $29.15 per share when considering the fair value of stock purchased and number of Company shares issued in conjunction with the acquisition. The total consideration paid by the Company in connection with the Dover Downs acquisition was approximately $115.9 million , or $96.4 million , net of cash acquired of $19.5 million . This preliminary purchase price excludes transaction costs. During the three months ended March 31, 2019 , the Company incurred $6.4 million of transaction costs related to the merger and becoming a publicly traded company. These costs are included in advertising, general and administrative in the condensed consolidated statements of operations and comprehensive income. The identifiable intangible assets recorded in connection with the closing of the merger based on preliminary valuations include trademarks of $3.9 million , rated player relationships of $0.8 million and hotel and conference pre-bookings of $0.4 million , which are being amortized on a straight-line basis over estimated useful lives of approximately ten years , eight years , and three years , respectively. The preliminary fair value of the identifiable intangible assets acquired was determined by using an income approach. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance. The Company accounted for the acquisition as a business combination using the acquisition method with Twin River as the accounting acquirer in accordance with FASB Codification Topic 805, Business Combinations (“ASC 805”) . Under this method of accounting the purchase price has been allocated to Dover Downs’ assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date. The following table summarizes the consideration paid and the preliminary fair values of the assets acquired and liabilities assumed. Due to the recent closing of the transaction, as of March 31, 2019, the purchase price allocation was preliminary and will be finalized when valuations are complete and final assessments of the fair value of other acquired assets and assumed liabilities are completed. There can be no assurance that such finalizations will not result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date), as the Company finalizes the valuations of certain tangible and intangible asset acquired and liabilities assumed. (in thousands) Preliminary as of March 31, 2019 Cash $ 19,500 Accounts receivable 5,674 Due from State of Delaware 2,535 Inventory 1,891 Prepaid expenses and other assets 2,586 Property and equipment 103,657 Right of use asset 1,333 Intangible assets 5,110 Deferred income tax assets 6,655 Other assets 320 Accounts payable (7,470 ) Purses due to horseman (2,613 ) Accrued and other current liabilities (13,014 ) Lease obligations (1,333 ) Pension benefit obligations (6,613 ) Other long-term liabilities (2,332 ) Total purchase price $ 115,886 Net revenue from the date of acquisition through the three months ended March 31, 2019 was $1.5 million . Net income from the date of acquisition through the three months ended March 31, 2019 was de minimis. The following table presents unaudited supplemental pro forma consolidated net revenue and net income based on Dover Downs’ historical reporting periods as if the acquisition had occurred as of January 1, 2018: Three Months Ended March 31, 2018 2019 Net revenue $ 127,580 $ 145,270 Net income $ 12,342 $ 22,460 Net income applicable to common stockholders $ 11,037 $ 22,460 Net income per share, basic $ 0.30 $ 0.59 Net income per share, diluted $ 0.29 $ 0.59 Black Hawk, Colorado On January 29, 2019, the Company entered into an agreement to acquire a subsidiary of Affinity Gaming (“Affinity”) that owns three casino properties located in Black Hawk, Colorado: Golden Gates, Golden Gulch and Mardi Gras. Pending regulatory approval, and the satisfaction of other customary closing condition, the transaction is expected to close in early 2020. |
SALE OF NEWPORT GRAND
SALE OF NEWPORT GRAND | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF NEWPORT GRAND | SALE OF NEWPORT GRAND On January 17, 2018, Newport Grand entered into a Purchase and Sale Agreement (the “Sale Agreement”) with a third party (the “Buyer”), pursuant to which the Buyer acquired the land and building relating to Newport Grand for $10.2 million in a transaction that closed on May 1, 2018. The Company leased back the Newport Grand from May 1, 2018 until November 1, 2018 at which time it vacated the property. This lease was accounted for as an operating lease. On August 28, 2018, Newport Grand was closed, and Tiverton Casino Hotel was opened on September 1, 2018. As of January 17, 2018, Newport Grand met the accounting guidance for assets held for sale, thus the Company recorded an impairment loss of $3.5 million during the three months ended March 31, 2018, for the difference between the fair value and the carrying value of the land, building and building improvements included in the Sale Agreement. The Company also recorded an expense of $2.4 million during the three months ended March 31, 2018, in accordance with ASC 450, Contingencies , as the amount due for certain liabilities became probable and reasonably estimable during the quarter ended March 31, 2018. The move from Newport Grand to Tiverton Casino Hotel occurred on September 1, 2018. The following sets forth the calculation of the Newport Grand disposal loss on the date the Company met the accounting guidance for assets held for sale for the three months ended March 31, 2018: (in thousands) Three Months Ended Stated sale price $ 10,150 Carrying value of Land, building and improvements (12,993 ) Transaction costs (669 ) Impairment loss (3,512 ) Participation fees (2,373 ) Newport Grand disposal loss $ (5,885 ) The sale of the Newport Grand assets did not qualify as a discontinued operation as the sale is not a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILTIES | ACCRUED LIABILITIES As of March 31, 2019 and December 31, 2018 , accrued liabilities consisted of the following: (in thousands) March 31, December 31, Gaming liabilities $ 20,910 $ 18,740 Compensation 13,918 16,622 Legal 2,610 3,784 Construction accruals 2,236 3,677 Property taxes 1,940 2,582 Purses due to horsemen 2,613 — Other 23,432 12,373 Total accrued liabilities $ 67,659 $ 57,778 |
LONG TERM DEBT
LONG TERM DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG TERM DEBT | LONG-TERM DEBT As of March 31, 2019 and December 31, 2018 , long-term debt consisted of the following: (in thousands) March 31, December 31, Term Loan principal $ 341,239 $ 342,439 Revolving Credit Facility 80,000 55,000 Less: Unamortized original issue discount (856 ) (1,027 ) Less: Unamortized deferred financing fees (1,868 ) (2,239 ) Long-term debt, including current portion 418,515 394,173 Less: current portion of Term Loan and Revolving Credit Facility (83,595 ) (3,595 ) Long-term debt, net of discount and deferred financing fees, excluding current portion $ 334,920 $ 390,578 Credit Agreements On July 10, 2014, the Company entered into a credit agreement (“Credit Facility”) which included a term loan (“Term Loan”) in the principal amount of $480.0 million and an original issue discount of 1% , payable in quarterly installments of $1.2 million with the balance payable upon maturity on July 10, 2020 and a revolving credit facility (“Revolving Credit Facility”) with an original capacity of $40.0 million and a capacity on March 31, 2019 of $150.0 million as a result of several amendments, the last of which occurred on March 26, 2019 and increased the capacity from $100.0 million to $150.0 million to, among other things, help fund the pay off of Dover Downs debt at the closing of the acquisition on March 28, 2019. The Revolving Credit Facility had a maturity date of January 10, 2020 and presented within current portion of long-term debt on the condensed consolidated balance sheet as of March 31, 2019 . The interest rate for the Term Loan and the Revolving Credit Facility was based on LIBOR, with a LIBOR floor of 1.00% on the Term Loan, plus a 3.50% interest rate margin per annum in the case of both the Term Loan and Revolving Credit Facility. Both the Term Loan and the Revolving Credit Facility were pre-payable at any time, provided notice was given. The interest rate for the Term Loan was 6.00% and 6.30% as of March 31, 2019 and December 31, 2018 , respectively. As of March 31, 2019 and December 31, 2018 , the Revolving Credit Facility balance was $80.0 million and $55.0 million , respectively, and amounts available were $70.0 million and $45.0 million , respectively. There were no letters of credit issued as of March 31, 2019 or December 31, 2018 . The weighted average interest rate on outstanding borrowings on the Revolving Credit facility was 6.62% and 6.26% on March 31, 2019 and December 31, 2018 , respectively. The Credit Facility was collateralized by substantially all of the assets of Twin River Casino Hotel, Tiverton Casino Hotel, Hard Rock Biloxi and Newport Grand (until the Company disposed of Newport Grand) and contained certain affirmative, negative and financial covenants, including compliance with a maximum leverage ratio when more than 20% of the capacity was drawn on the Revolving Credit Facility and limitations on capital expenditures. The Credit Facility also restricted the Company from making certain restricted payments, including dividends, subject to certain exceptions. Further, the Credit Facility restricted the Company’s ability to make any payment on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any equity interests in the Company, or any subsidiary guarantor, subject to certain exceptions. There are no operations at TRWH. Cash held as of December 31, 2018 was $0.2 million and was de minimis as of March 31, 2019. The Company was in compliance with all covenants as of March 31, 2019 . Subsequent Events New Credit Facility On May 10, 2019, the Company entered into a credit agreement with Citizens Bank, N.A., as administrative agent, and the lenders party thereto dated as of May 10, 2019 (the “New Credit Facility”), consisting of a $300.0 million term loan facility (the “New Term Loan Facility”) and a $250.0 million revolving credit facility (the “New Revolving Credit Facility” or “Revolver”). There were no borrowings on the Revolver at closing. The Company’s obligations under the Revolver will mature on May 10, 2024. The Company’s obligations under the New Term Loan Facility will mature on May 10, 2026. The Company is required to make quarterly principal payments of $750 thousand on the New Term Loan Facility on the last day of each fiscal quarter beginning on September 30, 2019. In addition, the Company may be required to make mandatory payments of amounts outstanding under the New Credit Facility with the proceeds of certain casualty events, debt issuances, and asset sales and the Company may be required to apply a portion of its excess cash flow to repay amounts outstanding under the New Credit Facility. 6.75% Senior Notes due 2027 On May 10, 2019, the Company, issued $400 million aggregate principal amount of 6.75% unsecured senior notes due June 1, 2027 (the “Senior Notes”). Interest on the Senior Notes will be paid semi-annually in arrears on June 1 and December 1. The Company used a portion of the net proceeds from the Senior Notes, together with a portion of the proceeds proceeds from our New Term Loan Facility, to repay borrowings under the Credit Facility. The balance of such net proceeds is currently held in cash form. The Senior Notes will be guaranteed, jointly and severally, by each of the Company’s restricted subsidiaries that guarantees our New Credit Facility and certain other debt (collectively, the “guarantors”). The Senior Notes and the guarantees will be our and the guarantors’ general senior unsecured obligations, ranking senior in right of payment to all of the Company’s and the guarantors’ future debt that is expressly subordinated in right of payment to the Senior Notes and the guarantees, if any, ranking equally in right of payment with all of our and the guarantors’ existing and future senior debt and will be effectively subordinated to all of our and the guarantors’ existing and future secured debt, including indebtedness under the New Credit Facility, to the extent of the value of the collateral securing such debt. In addition, the Senior Notes and the guarantees will be structurally subordinated to all existing and future indebtedness and other liabilities of the non-guarantor subsidiaries. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Operating Leases The Company is committed under various operating lease agreements primarily related to submerged tidelands, property and equipment. Hard Rock Biloxi has an agreement with the State of Mississippi for the lease and use of approximately five acres of submerged tidelands for a primary term of thirty years , expiring September 30, 2037. Upon expiration of the primary term, Hard Rock Biloxi will have an option to extend the lease for a renewal term of thirty years ; the renewal option has not been included in the calculation of the lease liability or right of use asset as the Company is not reasonably certain to exercise the option. Annual rent for the lease as of March 31, 2019 is approximately $1.2 million and adjusts annually by the increase in the consumer price index (“CPI”). Future changes to the CPI are treated as variable lease payments and are recognized in the period in which the obligation for those payments are incurred. Hard Rock Biloxi also has a Lease and Air Space agreement with the City of Biloxi. The agreement grants the Company rights to a parking area, and to the airspace above two defined parcels of land along with certain support structure rights for the construction of a parking garage. The arrangement has a 40 -year term expiring November 18, 2043 with one 25 -year renewal option; the renewal option has not been included in the calculation of the lease liability or right of use asset as the Company is not reasonably certain to exercise the option. Monthly rent escalates every 5 years based on CPI, and the tenant is responsible for property taxes. Future changes to the CPI are treated as variable lease payments and are recognized in the period in which the obligation for those payments are incurred. Certain of the Company’s subsidiaries lease office, parking space, memorabilia and equipment under agreements classified as operating leases that expire on various dates through 2027. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options. Discount rates used to determine the present value of the lease payments are based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. Variable expenses generally represent the Company’s share of the landlord’s operating expenses and CPI increases. The Company does not have any leases classified as financing leases. During the three months ended March 31, 2019 , two equipment leases were terminated via purchase of the underlying assets. At March 31, 2019 , the Company had operating lease liabilities of approximately $18.3 million and right of use assets of approximately $18.4 million , which were included in the condensed consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases: (in thousands) Three Months Ended Operating leases: Operating lease cost $ 797 Variable lease cost 29 Operating lease expense 826 Short-term lease expense 433 Total lease expense $ 1,259 (In thousands, except term and percentages) Three Months Ended Other information Cash paid for amounts included in the lease liability - operating cash flows from operating leases $ 809 Right of use assets obtained in exchange for operating lease liabilities $ 18,350 Weighted-average remaining lease term - operating leases 9.4 years Weighted-average discount rate - operating leases 6.6 % As of March 31, 2019 , future minimum rental commitments under noncancelable operating leases are as follows: (in thousands) Remaining 2019 $ 1,777 2020 2,330 2021 2,217 2022 1,846 2023 1,803 2024 1,753 Thereafter 19,503 Total 31,229 Less: present value discount (12,891 ) Operating lease obligations $ 18,338 As of December 31, 2018, as calculated under ASC 840, Leases , future undiscounted minimum rental commitments under noncancelable operating leases are as follows: (in thousands) 2019 $ 2,941 2020 2,308 2021 1,688 2022 1,627 2023 1,653 Thereafter 27,252 $ 37,469 The Company also has leasing arrangements with third-party lessees at its properties. Leasing arrangements for which the Company acts as a lessor are not deemed material as of March 31, 2019. |
BENEFIT PLANS
BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS The Company participates in and contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees. The Company acquired two defined benefit pension plans with the acquisition of Dover Downs on March 28, 2019, the Dover Downs Gaming & Entertainment, Inc. Pension Plan (“Dover Downs Pension Plan”) and the Dover Downs Gaming & Entertainment, Inc. Excess Pension Plan (“Excess Plan”). The acquisition resulted in a revaluation of the benefit pension plan obligation as of the acquisition date. Dover Downs Defined Benefit Pension Plan Dover Downs maintained the Dover Downs Pension Plan, a non-contributory, tax qualified defined benefit pension plan that has been frozen since July 2011. All full time employees, and part time employees who worked over 1,000 hours per year, were eligible to participate in the Dover Downs Pension Plan. Benefits provided by the qualified pension plan were based on years of service and employees’ remuneration over their term of employment. Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under the Dover Downs Pension Plan with no future benefit accruals after this date. As the Company consummated the acquisition of Dover Downs on March 28, 2019, the net periodic benefit (income) cost and other changes in plan assets and benefit obligations, excluding service cost, was immaterial for the three months ended March 31, 2019. The benefit obligation, fair value of plan assets and funded status of the Dover Downs Pension Plan assumed with the Dover Downs acquisition is as follows: (in thousands) March 28, Benefit obligation $ 24,067 Fair value of plan assets 17,454 Unfunded status $ (6,613 ) For the defined benefit pension plans, the accumulated benefit obligation is equal to the projected benefit obligation. The amount recognized in the condensed consolidated balance sheet as of the acquisition date is as follows: (in thousands) March 28, Pension benefit obligations $ 6,613 Assumptions The principal assumptions used to determine net periodic pension benefit cost and benefit obligation under the Dover Downs Pension Plan as of March 28, 2019 consisted of the following: Benefit Obligation Weighted-average discount rate 4.1 % Expected long-term rate of return on plan assets n/a The Company utilizes a spot rate approach to determine the benefit obligation and the subsequent years’ interest cost component of the net periodic pension benefit. This method uses individual spot rates along the yield curve that correspond with the timing of each benefit payment and will provide a more precise measurement of the interest cost by improving the correlation between projected benefit cash flows and the corresponding spot yield curve rates. The Society of Actuaries’ (“SOA”) RP 2014 Total Employee and Healthy Annuitant Mortality Tables rolled back to 2006 and projected with Mortality Improvement Scale MP-2018 are also utilized. For 2019 , the assumed long-term rate of return on plan assets is 7.5% . In developing the expected long-term rate of return assumption, the Company reviewed asset class return expectations and long-term inflation assumptions and considered its historical compounded return, which was consistent with its long-term rate of return assumption. Pension Plan Assets The Company’s investment goals for the Dover Downs Pension Plan assets are to achieve a combination of moderate growth of capital and income with moderate risk. Acceptable investment vehicles will include mutual funds, exchange-traded funds (“ETFs”), limited partnerships, and individual securities. Target allocations for plan assets are 60% equities and 40% fixed income. Of the equity portion, approximately 50% will be targeted to be invested in passively managed securities using ETFs and the other approximately 50% will be targeted to be invested in actively managed investment vehicles. Diversification is addressed by investing in mutual funds and ETFs which hold large, mid and small capitalization U.S. stocks, international (non-U.S.) equity, REITS, and real estate assets (consisting of inflation-linked bonds, real estate and natural resources). A percentage of investments are readily marketable in order to be sold to fund benefit payment obligations as they become payable. The asset allocation targets and the actual allocation of pension assets in the Dover Downs Pension Plan are as follows: Asset Category Target Actual Allocation at March 31, 2019 Equity Securities 60 % 69 % Debt Securities 40 % 29 % Other — % 2 % Total 100 % 100 % The fair values of pension assets in the Dover Downs Pension Plan as of March 31, 2019 by asset category are as follows: (in thousands) Asset Category Total Level 1 Level 2 Level 3 Mutual funds/ETFs: Equity-large cap $ 4,932 $ 4,932 $ — $ — Equity-mid cap 2,044 2,044 — — Equity-small cap 2,465 2,465 — — Equity-international 2,681 2,681 — — Fixed income 4,981 4,981 — — Money market 351 351 — — Total mutual funds/ETFs $ 17,454 $ 17,454 $ — $ — Contributions Minimum pension contributions of $0.4 are required to be made to the Dover Downs Pension Plan under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) in 2019 . We expect to contribute approximately $0.4 million to the Dover Downs Pension Plan in 2019 . Estimated Future Benefit Payments The estimated future benefit payments under the Dover Downs Pension Plan are as follows: (in thousands) Remaining 2019 $ 625 2020 873 2021 911 2022 964 2023 1,035 Years 2024-2028 5,918 Excess Plan Dover Downs had historically maintained the Excess Plan, a non-qualified, non-contributory defined benefit pension plan for certain employees that had been frozen since July 2011. This Excess Plan provided benefits that would otherwise be provided under the qualified Dover Downs Pension Plan but for maximum benefit and compensation limits applicable under federal tax law. The cost associated with the Excess Plan is determined using the same actuarial methods and assumptions as those used for the qualified Dover Downs Pension Plan. The Excess Plan was settled as of March 31, 2019. The Company made a settlement payment of $0.5 million during the three months ended March 31, 2019. The settlement payment is recorded within accrued liabilities on the opening balance sheet as of the acquisition date. Supplemental Executive Retirement Plan The Company also acquired Dover Downs’ non-elective, non-qualified supplemental executive retirement plan (“SERP”) which provides deferred compensation to certain highly compensated employees of Dover Downs. The SERP is a discretionary defined contribution plan and contributions made to the SERP in any given year are not guaranteed and will be at the sole discretion of the committee responsible for administering the SERP. The liability for SERP pension benefits as of the acquisition date was de minimis. 401(k) Plan The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code covering non-union employees and certain union employees. The plan allows employees to defer up to the lesser of the Internal Revenue Code prescribed maximum amount or 100% of their income on a pre-tax basis through contributions to the plan. Total employer contribution expense to the 401(k) profit-sharing plan was $0.3 million for the three months ended March 31, 2019 and 2018 . |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING As of March 31, 2019 , the Company has five operating segments: Twin River Casino Hotel, Hard Rock Biloxi, the Tiverton Casino Hotel, Dover Downs, and Mile High USA. Newport Grand, which represented an immaterial operating segment and operated up until its closing in August 2018, has been aggregated with Twin River Casino Hotel and Tiverton Casino Hotel to form the Rhode Island reportable segment. The Company’s Biloxi reportable segment includes only Hard Rock Biloxi. The Company is evaluating whether Dover Downs will be aggregated into one of the Company’s existing reportable segments or represent its own reportable segment. As of March 31, 2019 and reflected in the table below, the Company reported Dover Downs separately under the “Delaware” segment, which includes only Dover Downs. The “Other” category includes Mile High USA, an immaterial operating segment. "Other" also includes interest expense for the Company and certain corporate operating expenses that are not allocated to the other segments, which include, among other expenses, share-based compensation, merger and acquisition costs, and certain non-recurring charges. The Company’s operations are all within the United States. The Company does not have any revenues from any individual customers that exceed 10% of total reported revenues. The following table shows net revenues, income (loss), and identifiable assets for each of the Company’s reportable segments and reconciles these to amounts shown in the Company’s condensed consolidated financial statements. (in thousands) Rhode Island Delaware Biloxi Other Total Three Months Ended March 31, 2019 Net revenue $ 86,125 $ 1,525 $ 31,032 $ 1,949 $ 120,631 Income (loss) from operations 31,319 * 5,414 (6,426 ) 30,307 Income (loss) before provision for income taxes 29,007 * 5,418 (11,156 ) 23,269 Depreciation and amortization 4,415 * 2,307 47 6,769 Interest expense 2,319 * — 4,732 7,051 Capital expenditures 6,902 * 582 15 7,499 Goodwill 83,101 — 48,934 — 132,035 Total assets 550,274 140,407 261,645 (1,250 ) 951,076 Three Months Ended March 31, 2018 Net revenue $ 72,374 n/a $ 30,008 $ 2,424 $ 104,806 Income (loss) from operations 25,535 n/a 5,689 (6,347 ) 24,877 Income (loss) before provision for income taxes 23,067 n/a 5,689 (9,578 ) 19,178 Depreciation and amortization 2,863 n/a 2,313 36 5,212 Interest expense 2,468 n/a 4 3,267 5,739 Capital expenditures 17,868 n/a 1,270 23,372 42,510 Goodwill 83,101 n/a 48,934 — 132,035 Total assets 459,639 n/a 244,423 10,710 714,772 * Amounts are de minimis as there were only four day of operations included in 2019 first quarter results. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per common share (“EPS”) is calculated by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding and Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) for which no future service is required as a condition to the delivery of the underlying common stock (collectively, basic shares). Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect of the common stock deliverable for stock options, using the treasury stock method, and for RSUs and PSUs for which future service is required as a condition to the delivery of the underlying common stock. The table below presents the computations of basic and diluted EPS: Three Months Ended March 31, (in thousands, except per share data) 2019 2018 Net income applicable to common stockholders $ 17,596 $ 11,329 Weighted average shares outstanding, basic 38,248 36,823 Weighted average effect of dilutive securities 119 1,583 Weighted average shares outstanding, diluted 38,367 38,405 * Per share data Basic $ 0.46 $ 0.31 Diluted $ 0.46 $ 0.29 * - Reflects rounding For the three months ended March 31, 2019 and 2018 , there were no share-based awards that were considered anti-dilutive. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Refer to Note 7. “Long-Term Debt” for more information on the Company’s debt refinancing which closed May 10, 2019. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary TRMG and its subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. However, the results of operations for interim periods may not be indicative of the results that may be expected for a full year or any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Except as described below and in the Notes to the condensed consolidated financial statements, there were no material changes in significant accounting policies from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all cash balances and highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Treasury Stock | Treasury Stock The Company records the repurchase of shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
Fair Value Measurement | Fair Value Measurements Fair value is determined using the principles of ASC 820, Fair Value Measurement . Fair value is described as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes and defines the inputs to valuation techniques as follows: • Level 1: Observable quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs are observable for the asset or liability either directly or through corroboration with observable market data. • Level 3: Unobservable inputs. The Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company’s term loans and revolving credit facilities, including the current portion, approximate fair value as the terms and conditions of these loans are consistent with comparable market debt issuances. These measurements fall within Level 2 of the fair value hierarchy. The inputs used to measure the fair value of an asset or a liability are categorized within levels of the fair value hierarchy. The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the measurement. |
Leases | Leases Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases . Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Discount rates used to determine the present value of the lease payments are based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use asset and lease liability, the Company accounts for both the lease component and the non-lease component as a single component for all classes of underlying assets. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company also has leasing arrangements with third-party lessees at its properties. Leasing arrangements for which the Company acts as a lessor are not deemed to be material as of March 31, 2019. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. See Note 8 . “Leases” for further discussion. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by, among other provisions, recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous United States Generally Accepted Accounting Principles (“US GAAP”). For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods, which for the Company was the first quarter of 2019) using a modified retrospective approach and early adoption is permitted. In transition, entities may also elect a package of practical expedients that must be applied in its entirety to all leases commencing before the adoption date, unless the lease is modified, and permits entities to not reassess (a) the existence of a lease, (b) lease classification or (c) determination of initial direct costs, as of the adoption date, which effectively allows entities to carryforward accounting conclusions under previous U.S. GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides entities an optional transition method to apply the guidance under Topic 842 as of the adoption date, rather than as of the earliest period presented. The Company adopted Topic 842 on January 1, 2019, using the optional transition method to apply the new guidance as of January 1, 2019, rather than as of the earliest period presented, and elected the entire package of practical expedients described above. Based on the analysis, on January 1, 2019, the Company recorded right of use assets and a corresponding lease liability of approximately $18.8 million . There was no impact to opening retained earnings. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which changes the recognition and presentation requirements of hedge accounting, including eliminating the requirement to separately measure and report hedge ineffectiveness and presenting all items that affect earnings in the same income statement line item as the hedged item. The ASU also provides new alternatives for applying hedge accounting to additional hedging strategies, measuring the hedged item in fair value hedges of interest rate risk, reducing the cost and complexity of applying hedge accounting by easing the requirements for effectiveness testing, hedge documentation and application of the critical terms match method and reducing the risk of a material error correction if a company applies the shortcut method inappropriately. This ASU is effective for public companies in fiscal years beginning after December 15, 2018, which for the Company was the first quarter of 2019. The Company adopted the guidance in this ASU in the first quarter of 2019, with no impact to its condensed consolidated financial statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments . This standard amends several aspects of the measurement of credit losses on financial instruments, including trade receivables. The standard replaces the existing incurred credit loss model with the Current Expected Credit Losses (“CECL”) model and amends certain aspects of accounting for purchased financial assets with deterioration in credit quality since origination. Under CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of the financial assets, based on historical experience, current conditions and forecasts that affect the collectability of the reported amount. The standard is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for annual and interim periods beginning after December 15, 2018. Adoption is through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (a modified-retrospective approach). The impact of adoption on the Company’s consolidated financial statements will depend on, among other things, the economic environment and the type of financial assets held on the date of adoption. In August 2018, the FASB issued ASU No 2018-14, Compensation –Retirement Benefits – Defined Benefit Plans – General . This amendment improves disclosures over defined benefit plans and is effective for interim and annual periods ending after December 15, 2020 with early adoption allowed. The Company anticipates adopting this amendment during the first quarter of 2021, and does not expect it to have a significant impact on the condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820),—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. The Company does not expect the adoption of this guidance to have a material impact on its condensed consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Restricted Cash | The following table reconciles cash and restricted cash in the condensed consolidated balance sheets to the total shown on the condensed consolidated statements of cash flows. March 31, December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 103,002 $ 77,580 Restricted cash 9,698 3,851 Total cash and cash equivalents and restricted cash $ 112,700 $ 81,431 |
Schedule of Cash and Restricted Cash | The following table reconciles cash and restricted cash in the condensed consolidated balance sheets to the total shown on the condensed consolidated statements of cash flows. March 31, December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 103,002 $ 77,580 Restricted cash 9,698 3,851 Total cash and cash equivalents and restricted cash $ 112,700 $ 81,431 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Net Revenue | The estimated retail value related to goods and services provided to guests without charge or upon redemption under the Company’s player loyalty programs included in departmental revenues, and therefore reducing gaming revenues, are as follows for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, (in thousands) 2019 2018 Hotel $ 3,558 $ 2,533 Food and beverage 5,790 5,563 Other 1,378 1,062 $ 10,726 $ 9,158 The following table provides a disaggregation of net revenue by segment: (in thousands) Rhode Island Delaware Biloxi Other Total Three Months Ended March 31, 2019 Gaming $ 68,839 $ 969 $ 21,060 $ — $ 90,868 Racing 992 27 — 1,921 2,940 Hotel 1,541 144 4,620 — 6,305 Food and beverage 9,092 350 4,069 — 13,511 Other 5,661 35 1,283 28 7,007 Net revenue $ 86,125 $ 1,525 $ 31,032 $ 1,949 $ 120,631 Three Months Ended March 31, 2018 Gaming $ 59,443 n/a $ 20,139 $ — $ 79,582 Racing 872 n/a — 2,412 3,284 Hotel — n/a 4,454 — 4,454 Food and beverage 7,290 n/a 4,197 1 11,488 Other 4,769 n/a 1,218 11 5,998 Net revenue $ 72,374 n/a $ 30,008 $ 2,424 $ 104,806 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Consideration Transferred | (in thousands, except share and per share data) March 28, 2019 Dover Downs shares outstanding 33,125,997 Closing Dover Downs share price on March 27, 2019 $ 2.62 Total fair value of stock purchased * $ 86,790 Cash paid by the Company at closing, including amounts to retire Dover Downs debt, inclusive of accrued interest $ 29,096 Consideration transferred $ 115,886 *Shares issued at approximately $29.15 per share when considering the fair value of stock purchased and number of Company shares issued in conjunction with the acquisition. |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid and the preliminary fair values of the assets acquired and liabilities assumed. Due to the recent closing of the transaction, as of March 31, 2019, the purchase price allocation was preliminary and will be finalized when valuations are complete and final assessments of the fair value of other acquired assets and assumed liabilities are completed. There can be no assurance that such finalizations will not result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date), as the Company finalizes the valuations of certain tangible and intangible asset acquired and liabilities assumed. (in thousands) Preliminary as of March 31, 2019 Cash $ 19,500 Accounts receivable 5,674 Due from State of Delaware 2,535 Inventory 1,891 Prepaid expenses and other assets 2,586 Property and equipment 103,657 Right of use asset 1,333 Intangible assets 5,110 Deferred income tax assets 6,655 Other assets 320 Accounts payable (7,470 ) Purses due to horseman (2,613 ) Accrued and other current liabilities (13,014 ) Lease obligations (1,333 ) Pension benefit obligations (6,613 ) Other long-term liabilities (2,332 ) Total purchase price $ 115,886 |
Schedule of Supplemental Pro Forma Information | The following table presents unaudited supplemental pro forma consolidated net revenue and net income based on Dover Downs’ historical reporting periods as if the acquisition had occurred as of January 1, 2018: Three Months Ended March 31, 2018 2019 Net revenue $ 127,580 $ 145,270 Net income $ 12,342 $ 22,460 Net income applicable to common stockholders $ 11,037 $ 22,460 Net income per share, basic $ 0.30 $ 0.59 Net income per share, diluted $ 0.29 $ 0.59 |
SALE OF NEWPORT GRAND (Tables)
SALE OF NEWPORT GRAND (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Newport Grand Disposal Loss | The following sets forth the calculation of the Newport Grand disposal loss on the date the Company met the accounting guidance for assets held for sale for the three months ended March 31, 2018: (in thousands) Three Months Ended Stated sale price $ 10,150 Carrying value of Land, building and improvements (12,993 ) Transaction costs (669 ) Impairment loss (3,512 ) Participation fees (2,373 ) Newport Grand disposal loss $ (5,885 ) |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | As of March 31, 2019 and December 31, 2018 , accrued liabilities consisted of the following: (in thousands) March 31, December 31, Gaming liabilities $ 20,910 $ 18,740 Compensation 13,918 16,622 Legal 2,610 3,784 Construction accruals 2,236 3,677 Property taxes 1,940 2,582 Purses due to horsemen 2,613 — Other 23,432 12,373 Total accrued liabilities $ 67,659 $ 57,778 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | As of March 31, 2019 and December 31, 2018 , long-term debt consisted of the following: (in thousands) March 31, December 31, Term Loan principal $ 341,239 $ 342,439 Revolving Credit Facility 80,000 55,000 Less: Unamortized original issue discount (856 ) (1,027 ) Less: Unamortized deferred financing fees (1,868 ) (2,239 ) Long-term debt, including current portion 418,515 394,173 Less: current portion of Term Loan and Revolving Credit Facility (83,595 ) (3,595 ) Long-term debt, net of discount and deferred financing fees, excluding current portion $ 334,920 $ 390,578 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Quantitative Information of Operating Leases | The following summarizes quantitative information about the Company’s operating leases: (in thousands) Three Months Ended Operating leases: Operating lease cost $ 797 Variable lease cost 29 Operating lease expense 826 Short-term lease expense 433 Total lease expense $ 1,259 (In thousands, except term and percentages) Three Months Ended Other information Cash paid for amounts included in the lease liability - operating cash flows from operating leases $ 809 Right of use assets obtained in exchange for operating lease liabilities $ 18,350 Weighted-average remaining lease term - operating leases 9.4 years Weighted-average discount rate - operating leases 6.6 % |
Schedule of Future Minimum Rental Commitments | As of March 31, 2019 , future minimum rental commitments under noncancelable operating leases are as follows: (in thousands) Remaining 2019 $ 1,777 2020 2,330 2021 2,217 2022 1,846 2023 1,803 2024 1,753 Thereafter 19,503 Total 31,229 Less: present value discount (12,891 ) Operating lease obligations $ 18,338 |
Schedule of Future Minimum Rental Commitments Under ASC 840 | As of December 31, 2018, as calculated under ASC 840, Leases , future undiscounted minimum rental commitments under noncancelable operating leases are as follows: (in thousands) 2019 $ 2,941 2020 2,308 2021 1,688 2022 1,627 2023 1,653 Thereafter 27,252 $ 37,469 |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of the Benefit Obligation, Fair Value of Plan Assets, and Funded Status | The benefit obligation, fair value of plan assets and funded status of the Dover Downs Pension Plan assumed with the Dover Downs acquisition is as follows: (in thousands) March 28, Benefit obligation $ 24,067 Fair value of plan assets 17,454 Unfunded status $ (6,613 ) |
Schedule of Amounts Recognized in Balance Sheet | The amount recognized in the condensed consolidated balance sheet as of the acquisition date is as follows: (in thousands) March 28, Pension benefit obligations $ 6,613 |
Schedule of Assumptions Used | The principal assumptions used to determine net periodic pension benefit cost and benefit obligation under the Dover Downs Pension Plan as of March 28, 2019 consisted of the following: Benefit Obligation Weighted-average discount rate 4.1 % Expected long-term rate of return on plan assets n/a |
Schedule of Allocation of Plan Assets | The asset allocation targets and the actual allocation of pension assets in the Dover Downs Pension Plan are as follows: Asset Category Target Actual Allocation at March 31, 2019 Equity Securities 60 % 69 % Debt Securities 40 % 29 % Other — % 2 % Total 100 % 100 % The fair values of pension assets in the Dover Downs Pension Plan as of March 31, 2019 by asset category are as follows: (in thousands) Asset Category Total Level 1 Level 2 Level 3 Mutual funds/ETFs: Equity-large cap $ 4,932 $ 4,932 $ — $ — Equity-mid cap 2,044 2,044 — — Equity-small cap 2,465 2,465 — — Equity-international 2,681 2,681 — — Fixed income 4,981 4,981 — — Money market 351 351 — — Total mutual funds/ETFs $ 17,454 $ 17,454 $ — $ — |
Schedule of Estimated Future Benefit Payments | The estimated future benefit payments under the Dover Downs Pension Plan are as follows: (in thousands) Remaining 2019 $ 625 2020 873 2021 911 2022 964 2023 1,035 Years 2024-2028 5,918 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Information | The following table shows net revenues, income (loss), and identifiable assets for each of the Company’s reportable segments and reconciles these to amounts shown in the Company’s condensed consolidated financial statements. (in thousands) Rhode Island Delaware Biloxi Other Total Three Months Ended March 31, 2019 Net revenue $ 86,125 $ 1,525 $ 31,032 $ 1,949 $ 120,631 Income (loss) from operations 31,319 * 5,414 (6,426 ) 30,307 Income (loss) before provision for income taxes 29,007 * 5,418 (11,156 ) 23,269 Depreciation and amortization 4,415 * 2,307 47 6,769 Interest expense 2,319 * — 4,732 7,051 Capital expenditures 6,902 * 582 15 7,499 Goodwill 83,101 — 48,934 — 132,035 Total assets 550,274 140,407 261,645 (1,250 ) 951,076 Three Months Ended March 31, 2018 Net revenue $ 72,374 n/a $ 30,008 $ 2,424 $ 104,806 Income (loss) from operations 25,535 n/a 5,689 (6,347 ) 24,877 Income (loss) before provision for income taxes 23,067 n/a 5,689 (9,578 ) 19,178 Depreciation and amortization 2,863 n/a 2,313 36 5,212 Interest expense 2,468 n/a 4 3,267 5,739 Capital expenditures 17,868 n/a 1,270 23,372 42,510 Goodwill 83,101 n/a 48,934 — 132,035 Total assets 459,639 n/a 244,423 10,710 714,772 * Amounts are de minimis as there were only four day of operations included in 2019 first quarter results. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computations of Basic and Diluted EPS | The table below presents the computations of basic and diluted EPS: Three Months Ended March 31, (in thousands, except per share data) 2019 2018 Net income applicable to common stockholders $ 17,596 $ 11,329 Weighted average shares outstanding, basic 38,248 36,823 Weighted average effect of dilutive securities 119 1,583 Weighted average shares outstanding, diluted 38,367 38,405 * Per share data Basic $ 0.46 $ 0.31 Diluted $ 0.46 $ 0.29 * - Reflects rounding |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | Jan. 29, 2019casino | Jan. 18, 2019$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Class of Stock [Line Items] | ||||
Number of businesses acquired | casino | 3 | |||
Stock split, conversion ratio | 3 | |||
Common stock issued (in shares) | 41,128,181 | 39,421,356 | ||
Common stock authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |
Treasury stock retired (in shares) | 1,431,980 | |||
Stock repurchased (in shares) | 16,340 | |||
Stock repurchased | $ | $ 409 | |||
Previously Reported | ||||
Class of Stock [Line Items] | ||||
Common stock issued (in shares) | 9,855,339 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 103,002 | $ 77,580 | ||
Restricted cash | 9,698 | 3,851 | ||
Total cash and cash equivalents and restricted cash | $ 112,700 | $ 81,431 | $ 70,527 | $ 93,216 |
RECENTLY ADOPTED AND ISSUED A_2
RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right of use assets, net | $ 18,350 | $ 0 | |
Lease liability | $ 18,338 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right of use assets, net | $ 18,800 | ||
Lease liability | $ 18,800 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019USD ($)terminal | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Contracts with customers receivables | $ 17.1 | $ 13.3 | |
Loyalty Programs | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | 11 | 9.5 | |
Contract liabilities, revenue recognized | 2.3 | $ 2 | |
Customer Deposits | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | 2.4 | 0.6 | |
Unpaid Tickets | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | $ 0.9 | $ 0.9 | |
Rhode Island | VLT Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Number of Video Lottery Terminals (VLTs) | terminal | 3,002 | ||
Rhode Island | Table Games Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of share of revenues | 83.50% | ||
Rhode Island | Threshold One | VLT Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of share of revenues | 28.85% | ||
Rhode Island | Threshold Two | VLT Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of share of revenues | 26.00% | ||
Delaware | VLT Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of share of revenues | 42.00% | ||
Delaware | Table Games Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of share of revenues | 80.00% |
REVENUE RECOGNITION - Loyalty P
REVENUE RECOGNITION - Loyalty Programs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Goods and services provided without charge | $ 3,558 | $ 2,533 |
Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Goods and services provided without charge | 5,790 | 5,563 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Goods and services provided without charge | 1,378 | 1,062 |
Loyalty Programs | ||
Disaggregation of Revenue [Line Items] | ||
Goods and services provided without charge | $ 10,726 | $ 9,158 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 120,631 | $ 104,806 |
Gaming | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 90,868 | 79,582 |
Racing | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 2,940 | 3,284 |
Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 6,305 | 4,454 |
Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 13,511 | 11,488 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 7,007 | 5,998 |
Rhode Island | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 86,125 | 72,374 |
Rhode Island | Gaming | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 68,839 | 59,443 |
Rhode Island | Racing | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 992 | 872 |
Rhode Island | Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,541 | 0 |
Rhode Island | Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 9,092 | 7,290 |
Rhode Island | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 5,661 | 4,769 |
Delaware | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,525 | |
Delaware | Gaming | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 969 | |
Delaware | Racing | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 27 | |
Delaware | Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 144 | |
Delaware | Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 350 | |
Delaware | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 35 | |
Biloxi | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 31,032 | 30,008 |
Biloxi | Gaming | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 21,060 | 20,139 |
Biloxi | Racing | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Biloxi | Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 4,620 | 4,454 |
Biloxi | Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 4,069 | 4,197 |
Biloxi | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,283 | 1,218 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,949 | 2,424 |
Other | Gaming | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Other | Racing | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,921 | 2,412 |
Other | Hotel | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Other | Food and beverage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 1 |
Other | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 28 | $ 11 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | Mar. 31, 2019USD ($) | Mar. 28, 2019USD ($)shares | Jan. 29, 2019casino | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Total consideration paid, net of cash acquired | $ 9,606 | $ 0 | |||
Number of businesses acquired | casino | 3 | ||||
Dover Downs | |||||
Business Acquisition [Line Items] | |||||
Percentage of common stock owned by acquiree | 7.225% | ||||
Common stock issued (in shares) | shares | 2,976,825 | ||||
Total consideration paid | $ 115,886 | ||||
Total consideration paid, net of cash acquired | 96,400 | ||||
Cash acquired | 19,500 | ||||
Transaction costs | $ 6,400 | ||||
Net revenue from date of acquisition | $ 1,500 | ||||
Black Hawk | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | casino | 3 | ||||
Trademarks | Dover Downs | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 3,900 | ||||
Acquired intangible assets, useful life | 10 years | ||||
Rated Player Relationships | Dover Downs | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 800 | ||||
Acquired intangible assets, useful life | 8 years | ||||
Hotel and Conference Pre-bookings | Dover Downs | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 400 | ||||
Acquired intangible assets, useful life | 3 years |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - Dover Downs $ / shares in Units, $ in Thousands | Mar. 28, 2019USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Dover Downs shares outstanding (in shares) | shares | 33,125,997 |
Closing Dover Downs share price on March 27, 2019 (in dollars per share) | $ / shares | $ 2.62 |
Total fair value of stock purchased | $ 86,790 |
Cash paid by the Company at closing, including amounts to retire Dover Downs debt, inclusive of accrued interest | 29,096 |
Consideration transferred | $ 115,886 |
Shares issued (in dollars per share) | $ / shares | $ 29.15 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - Dover Downs $ in Thousands | Mar. 31, 2019USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 19,500 |
Accounts receivable | 5,674 |
Due from State of Delaware | 2,535 |
Inventory | 1,891 |
Prepaid expenses and other assets | 2,586 |
Property and equipment | 103,657 |
Right of use asset | 1,333 |
Intangible assets | 5,110 |
Deferred income tax assets | 6,655 |
Other assets | 320 |
Accounts payable | (7,470) |
Purses due to horseman | (2,613) |
Accrued and other current liabilities | (13,014) |
Lease obligations | (1,333) |
Pension benefit obligations | (6,613) |
Other long-term liabilities | (2,332) |
Total purchase price | $ 115,886 |
ACQUISITIONS - Supplemental Pro
ACQUISITIONS - Supplemental Pro Forma Information (Details) - Dover Downs - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition [Line Items] | ||
Net revenue | $ 145,270 | $ 127,580 |
Net income | 22,460 | 12,342 |
Net income applicable to common stockholders | $ 22,460 | $ 11,037 |
Net income per share, basic (in dollars per share) | $ 0.59 | $ 0.30 |
Net income per share, diluted (in dollars per share) | $ 0.59 | $ 0.29 |
SALE OF NEWPORT GRAND (Details)
SALE OF NEWPORT GRAND (Details) - Sale of Newport Grand - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 17, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Stated sale price | $ 10,150 | $ 10,200 |
Impairment loss | 3,512 | |
Contingencies expense | $ 2,373 |
SALE OF NEWPORT GRAND - Loss on
SALE OF NEWPORT GRAND - Loss on Disposal (Details) - Sale of Newport Grand - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 17, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Stated sale price | $ 10,150 | $ 10,200 |
Carrying value of Land, building and improvements | (12,993) | |
Transaction costs | (669) | |
Impairment loss | (3,512) | |
Participation fees | (2,373) | |
Newport Grand disposal loss | $ (5,885) |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Gaming liabilities | $ 20,910 | $ 18,740 |
Compensation | 13,918 | 16,622 |
Legal | 2,610 | 3,784 |
Construction accruals | 2,236 | 3,677 |
Property taxes | 1,940 | 2,582 |
Purses due to horsemen | 2,613 | 0 |
Other | 23,432 | 12,373 |
Total accrued liabilities | $ 67,659 | $ 57,778 |
LONG TERM DEBT - Schedule of Lo
LONG TERM DEBT - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Less: Unamortized original issue discount | $ (856) | $ (1,027) |
Less: Unamortized deferred financing fees | (1,868) | (2,239) |
Long-term debt, including current portion | 418,515 | 394,173 |
Less: current portion of Term Loan and Revolving Credit Facility | (83,595) | (3,595) |
Long-term debt, net of discount and deferred financing fees, excluding current portion | 334,920 | 390,578 |
Term Loan | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 341,239 | 342,439 |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 80,000 | $ 55,000 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | May 10, 2019 | Jul. 10, 2014 | Mar. 31, 2019 | Mar. 26, 2019 | Mar. 25, 2019 | Dec. 31, 2018 |
Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 6.62% | 6.26% | ||||
Line of Credit | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of capacity drawn results in restrictions, more than | 20.00% | |||||
Cash held | $ 200,000 | |||||
Term Loan | Line of Credit | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 480,000,000 | |||||
Discount at issuance | 1.00% | |||||
Payment amount | $ 1,200,000 | |||||
Interest rate | 6.00% | 6.30% | ||||
Term Loan | Line of Credit | Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 3.50% | |||||
Revolving Credit Facility | Line of Credit | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 40,000,000 | $ 150,000,000 | $ 150,000,000 | $ 100,000,000 | ||
Outstanding balance | 80,000,000 | $ 55,000,000 | ||||
Amounts available for borrowing | 70,000,000 | 45,000,000 | ||||
Revolving Credit Facility | Line of Credit | Credit Facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Floor on variable rate | 1.00% | |||||
Basis spread on variable rate | 3.50% | |||||
Letter of Credit | Line of Credit | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding balance | $ 0 | $ 0 | ||||
Subsequent Event | Senior Notes | Senior Unsecured Notes Due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 400,000,000 | |||||
Interest rate | 6.75% | |||||
Subsequent Event | Term Loan | Line of Credit | New Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Payment amount | $ 750,000 | |||||
Maximum borrowing capacity | 300,000,000 | |||||
Subsequent Event | Revolving Credit Facility | Line of Credit | New Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 250,000,000 | |||||
Outstanding balance | $ 0 |
LEASES (Details)
LEASES (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)aleaseparcel | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Lease liability | $ 18,338 | |
Right of use assets, net | $ 18,350 | $ 0 |
Tidelands In Mississippi | ||
Lessee, Lease, Description [Line Items] | ||
Area of lease | a | 5 | |
Term of contract | 30 years | |
Renewal term | 30 years | |
Annual rent | $ 1,200 | |
Lease And Air Space Agreement | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract | 40 years | |
Renewal term | 25 years | |
Number of parcels of land | parcel | 2 | |
Frequency of rent escalation | 5 years | |
Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Number of leases terminated | lease | 2 |
LEASES - Quantitative Informati
LEASES - Quantitative Information of Operating Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost | $ 797 |
Variable lease cost | 29 |
Operating lease expense | 826 |
Short-term lease expense | 433 |
Total lease expense | 1,259 |
Cash paid for amounts included in the lease liability - operating cash flows from operating leases | 809 |
Right of use assets obtained in exchange for operating lease liabilities | $ 18,350 |
Weighted-average remaining lease term - operating leases | 9 years 4 months 24 days |
Weighted-average discount rate - operating leases | 6.60% |
LEASES - Future Minimum Rental
LEASES - Future Minimum Rental Commitments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 1,777 |
2020 | 2,330 |
2021 | 2,217 |
2022 | 1,846 |
2023 | 1,803 |
2024 | 1,753 |
Thereafter | 19,503 |
Total | 31,229 |
Less: present value discount | (12,891) |
Operating lease obligations | $ 18,338 |
LEASES - ASC 840 Future Minimum
LEASES - ASC 840 Future Minimum Rental Commitments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 2,941 |
2020 | 2,308 |
2021 | 1,688 |
2022 | 1,627 |
2023 | 1,653 |
Thereafter | 27,252 |
Future minimum payments due | $ 37,469 |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) $ in Millions | Mar. 28, 2019plan | Mar. 31, 2019USD ($)hour |
Defined Benefit Plan Disclosure [Line Items] | ||
Number of defined benefit plans acquired | plan | 2 | |
Dover Downs Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Eligibility hours worked per year | hour | 1,000 | |
Assumed long-term rate of return on plan assets | 7.50% | |
Plan assets, target allocation | 100.00% | |
Minimum required pension contributions | $ 0.4 | |
Expected employer contributions | $ 0.4 | |
Dover Downs Pension Plan | Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 60.00% | |
Dover Downs Pension Plan | Equity Securities | Passively Managed | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 50.00% | |
Dover Downs Pension Plan | Equity Securities | Actively Managed | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 50.00% | |
Dover Downs Pension Plan | Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 40.00% | |
Excess Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Settlement payment | $ 0.5 |
BENEFIT PLANS - Benefit Obligat
BENEFIT PLANS - Benefit Obligation, Fair Value of Plan Assets, and Funded Status (Details) - Dover Downs Pension Plan - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 28, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligation | $ 24,067 | |
Fair value of plan assets | $ 17,454 | 17,454 |
Unfunded status | $ (6,613) |
BENEFIT PLANS - Amounts Recogni
BENEFIT PLANS - Amounts Recognized in Balance Sheet (Details) $ in Thousands | Mar. 28, 2019USD ($) |
Dover Downs Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Pension benefit obligations | $ 6,613 |
BENEFIT PLANS - Assumptions Use
BENEFIT PLANS - Assumptions Used (Details) | Mar. 28, 2019 |
Dover Downs Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Weighted-average discount rate | 4.10% |
BENEFIT PLANS - Allocation of P
BENEFIT PLANS - Allocation of Plan Assets (Details) - Dover Downs Pension Plan - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 28, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 100.00% | |
Plan assets, actual allocation | 100.00% | |
Fair value of plan assets | $ 17,454 | $ 17,454 |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 17,454 | |
Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 0 | |
Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 60.00% | |
Plan assets, actual allocation | 69.00% | |
Debt Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 40.00% | |
Plan assets, actual allocation | 29.00% | |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, target allocation | 0.00% | |
Plan assets, actual allocation | 2.00% | |
Equity-large cap | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 4,932 | |
Equity-large cap | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 4,932 | |
Equity-large cap | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-large cap | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-mid cap | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,044 | |
Equity-mid cap | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,044 | |
Equity-mid cap | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-mid cap | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-small cap | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,465 | |
Equity-small cap | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,465 | |
Equity-small cap | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-small cap | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-international | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,681 | |
Equity-international | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,681 | |
Equity-international | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Equity-international | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 4,981 | |
Fixed income | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 4,981 | |
Fixed income | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Fixed income | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Money market | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 351 | |
Money market | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 351 | |
Money market | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Money market | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 0 |
BENEFIT PLANS - Estimated Futur
BENEFIT PLANS - Estimated Future Benefit Payments (Details) - Dover Downs Pension Plan $ in Thousands | Mar. 31, 2019USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Remaining 2019 | $ 625 |
2020 | 873 |
2021 | 911 |
2022 | 964 |
2023 | 1,035 |
Years 2024-2028 | $ 5,918 |
BENEFIT PLANS - 401(k) Plan Nar
BENEFIT PLANS - 401(k) Plan Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Maximum percentage of employees income available for contribution | 100.00% | |
Employer contribution expense | $ 0.3 | $ 0.3 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 5 | ||
Net revenue | $ 120,631 | $ 104,806 | |
Income (loss) from operations | 30,307 | 24,877 | |
Income (loss) before provision for income taxes | 23,269 | 19,178 | |
Depreciation and amortization | 6,769 | 5,212 | |
Interest expense | 7,051 | 5,739 | |
Capital expenditures | 7,499 | 42,510 | |
Goodwill | 132,035 | 132,035 | $ 132,035 |
Total assets | 951,076 | 714,772 | $ 782,352 |
Rhode Island | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 86,125 | 72,374 | |
Income (loss) from operations | 31,319 | 25,535 | |
Income (loss) before provision for income taxes | 29,007 | 23,067 | |
Depreciation and amortization | 4,415 | 2,863 | |
Interest expense | 2,319 | 2,468 | |
Capital expenditures | 6,902 | 17,868 | |
Goodwill | 83,101 | 83,101 | |
Total assets | 550,274 | 459,639 | |
Delaware | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 1,525 | ||
Goodwill | 0 | ||
Total assets | $ 140,407 | ||
Days of operations in results | 4 days | ||
Biloxi | |||
Segment Reporting Information [Line Items] | |||
Net revenue | $ 31,032 | 30,008 | |
Income (loss) from operations | 5,414 | 5,689 | |
Income (loss) before provision for income taxes | 5,418 | 5,689 | |
Depreciation and amortization | 2,307 | 2,313 | |
Interest expense | 0 | 4 | |
Capital expenditures | 582 | 1,270 | |
Goodwill | 48,934 | 48,934 | |
Total assets | 261,645 | 244,423 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 1,949 | 2,424 | |
Income (loss) from operations | (6,426) | (6,347) | |
Income (loss) before provision for income taxes | (11,156) | (9,578) | |
Depreciation and amortization | 47 | 36 | |
Interest expense | 4,732 | 3,267 | |
Capital expenditures | 15 | 23,372 | |
Goodwill | 0 | 0 | |
Total assets | $ (1,250) | $ 10,710 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income applicable to common stockholders | $ 17,596 | $ 11,329 |
Weighted average shares outstanding, basic (in shares) | 38,248,000 | 36,823,000 |
Weighted average effect of dilutive securities (in shares) | 119,000 | 1,583,000 |
Weighted average shares outstanding, diluted (in shares) | 38,367,000 | 38,405,000 |
Per share data | ||
Basic (in dollars per share) | $ 0.46 | $ 0.31 |
Diluted (in dollars per share) | $ 0.46 | $ 0.29 |
Share-based awards considered to be anti-dilutive (in shares) | 0 | 0 |