Exhibit 99
FOR IMMEDIATE RELEASE | | CONTACT: | Glenn Schaeffer |
| | | 702-632-6710 or |
| | | Les Martin |
| | | 702-632-6820 |
MANDALAY RESORT GROUP
REPORTS RECORD FIRST
QUARTER RESULTS
LAS VEGAS, NVBJune 3, 2004BMandalay Resort Group (NYSE: MBG) today announced results for its first quarter ended April 30, 2004. For the quarter, the company reported net income of $87.3 million, or $1.30 per diluted share, compared with $44.0 million, or $.69 per diluted share, in the prior year. These results represent the all-time record for any quarter in the company’s history.
Results in the current year quarter include a gain of $1.5 million ($.01 per diluted share) representing the quarterly noncash adjustment of the carrying value of investments associated with the company=s executive retirement plan. Results for the quarter also include a noncash loss of $0.9 million ($.01 per diluted share) related to interest rate swaps. Results for the prior-year first quarter included a loss of $1.1 million ($.01 per diluted share) representing the quarterly adjustment to the carrying value of the retirement plan investments.
Average diluted shares outstanding in the quarter were 67.0 million versus 64.2 million in the prior year. This reflects the issuance of shares pursuant to the exercise of employee stock options over the course of the past year, partially offset by the company’s purchase of 3.3 million shares pursuant to the March 2003 settlement of its equity forward agreement. Total shares outstanding (excluding any dilutive effect from outstanding stock options) were 67.5 million at April 30, 2004, compared with 59.3 million at April 30, 2003.
Mandalay=s operating cash flow (which is not a defined term under Generally Accepted Accounting PrinciplesBsee Note 1 below) was $234.7 million for the quarter ended April 30, 2004, compared with $172.4 million in the prior year quarter. The financial schedules accompanying this release provide a reconciliation of operating cash flow to net income as required by the Securities and Exchange Commission=s Regulation G.
LAS VEGAS STRIP
Operating cash flow at the company=s Las Vegas Strip properties (including the 50%-owned Monte Carlo) increased 43% in the first quarter, driven by a 25% increase in revenue per available room (AREVPAR@), and an 18% increase in casino revenues. With the exception of Circus Circus-Las Vegas, all of the company’s Las Vegas Strip properties reported all-time record quarterly results.
Mandalay Bay generated operating cash flow of $77.4 million in the first quarter, up 67% from $46.4 million last year. Including the additional 1,117 suites in THEhotel which opened December 2003, REVPAR rose 16%, with an average room rate of $210 and 89% occupancy. The average room rate in THEhotel was $239 with 86% occupancy. Meanwhile, slot revenues rose 30% in the first quarter due to the additional traffic generated by THEhotel and Mandalay Place, the retail shopping experience located between Mandalay Bay and Luxor which opened October 2003. “As promised, THEhotel is delivering high returns, capitalizing on Mandalay’s expanded convention presence as well as the overall strength of the destination resort market in Las Vegas,” noted Glenn Schaeffer, the company=s President and Chief
Financial Officer. “Our other Las Vegas properties have likewise performed on a dramatic course, capturing this strength in the market, as they continued to outperform their competitors in class.”
Luxor produced operating cash flow of $42.3 million compared with $32.5 million a year ago. REVPAR at this property increased 24%, as the average room rate topped $120, its highest ever quarterly level. Casino revenues at this property also grew significantly, up by 21%. Meanwhile, operating cash flow at Excalibur rose 27% to $31.9 million, with REVPAR rising 23% on its 4,000 rooms. At Circus-Circus, operating cash flow was $21.3 million in the quarter, up 35% from the prior year. REVPAR at this property increased 18%, while casino revenues rose 12%. For its part, Monte Carlo (50%-owned by Mandalay) reported a 33% increase in operating cash flow, to $29.8 million. REVPAR increased 24% and casino revenues increased 9%.
OTHER NEVADA MARKETS
In a significant turnaround from recent trends, combined operating cash flow at the company=s other Nevada properties (in Reno, Laughlin, Jean and Henderson) increased from the prior year first quarter. While expanded Native American gaming in California continues to impact our operations, the rebound in the economy has contributed to improved results at these properties. Please refer to the financial schedules accompanying this release for additional details by market.
OTHER MARKETS
In Elgin, Illinois, operating cash flow at the 50%-owned Grand Victoria was $14.0 million in the first quarter, down 41% from $23.8 million in the prior year quarter. The
decrease was attributable to higher gaming taxes which took effect July 1, 2003 and raised the top-end rate to 70% on gaming revenues exceeding $250 million. This tax increase impacted Mandalay=s earnings by approximately $.06 per diluted share in the quarter.
In Detroit, Michigan, MotorCity generated operating cash flow of $41.4 million, up 26% from $32.8 million last year. In Tunica County, Mississippi, operating cash flow at the company=s Gold Strike Resort was $8.7 million compared with $7.3 million a year ago.
RECENT DEVELOPMENTS
On May 2, 2004, the company paid a quarterly dividend of $.27 per share to shareholders of record April 16, 2004. On June 2, 2004, the company=s Board of Directors declared a dividend of $.27 per share payable August 2, 2004 to shareholders of record July 15, 2004.
This press release contains Aforward-looking statements@ within the meaning of the federal securities law. The forward-looking statements in this press release involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements herein.
Additional information concerning potential factors that could affect the company=s future financial results is included under the caption AFactors that May Affect Our Future Results@ in Item 1 of the company=s annual report on Form 10-K for the year ended January 31, 2004.
Mandalay Resort Group owns and operates 11 properties in Nevada: Mandalay Bay, Luxor, Excalibur, Circus Circus, and Slots-A-Fun in Las Vegas; Circus Circus-Reno; Colorado Belle and Edgewater in Laughlin; Gold Strike and Nevada Landing in Jean and Railroad Pass in Henderson. The company also owns and operates Gold Strike, a hotel/casino in Tunica County, Mississippi. The company owns a 50% interest in Silver Legacy in Reno, and owns a 50% interest in and operates Monte Carlo in Las Vegas. In addition, the company owns a 50% interest in and operates Grand Victoria, a riverboat in Elgin, Illinois, and owns a 53.5% interest in and operates MotorCity in Detroit, Michigan.
NOTE 1: As used in this release, operating cash flow represents net income adjusted to exclude income taxes, net interest expense, minority interest, noncash expenses (principally depreciation and amortization) and certain other expenses that are not considered directly related to ongoing operations, such as operating lease rent and preopening expenses. Operating cash flow is presented as supplemental disclosure because it is widely viewed by investors as a key measure of operating performance in the gaming industry and it is also used as a principal basis for valuing gaming companies. Management utilizes operating cash flow in a similar manner to monitor and evaluate the relative performance of its various operating resorts, including the evaluation of management personnel at both the property and corporate levels. Operating cash flow is not an accepted measure under Generally Accepted Accounting Principles ("GAAP") and should not be considered an alternative to GAAP measures of performance, such as net income or income from operations, or as an alternative to GAAP measures of liquidity, such as net cash provided by operating activities. A reconciliation of net income to operating cash flow is provided, on a consolidated basis as well as by property, in the financial schedules accompanying this release. Operating cash flow is sometimes referred to as earnings before interest, taxes, depreciation and amortization ("EBITDA"). Other gaming companies that report operating cash flow or EBITDA may calculate their results in a different manner than the company.
###
MANDALAY RESORT GROUP
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data)
(UNAUDITED)
| | Three Months Ended April 30, | |
| | 2004 | | 2003 | |
| | | | | |
Revenues | | $ | 729,368 | | $ | 616,510 | |
| | | | | | | |
Costs and expenses | | (551,344 | ) | (502,115 | ) |
| | | | | |
| | 178,024 | | 114,395 | |
| | | | | |
Preopening expense | | — | | (88 | ) |
| | | | | |
Earnings of unconsolidated affiliates | | 21,662 | | 22,740 | |
| | | | | |
Income from operations | | 199,686 | | 137,047 | |
| | | | | |
Interest expense | | (48,844 | ) | (53,162 | ) |
| | | | | |
Other income (expense) | | 1,347 | | (1,206 | ) |
| | | | | |
Minority interest | | (17,651 | ) | (13,856 | ) |
| | | | | |
Income before income tax | | 134,538 | | 68,823 | |
| | | | | |
Income tax expense | | (47,210 | ) | (24,777 | ) |
| | | | | |
Net income | | $ | 87,328 | | $ | 44,046 | |
| | | | | | | |
Basic earnings per share | | $ | 1.32 | | $ | 0.72 | |
| | | | | | | |
Diluted earnings per share | | $ | 1.30 | | $ | 0.69 | |
| | | | | | | |
Average shares outstanding (basic) | | 66,225,924 | | 61,598,245 | |
| | | | | |
Average shares outstanding (diluted) | | 66,974,204 | | 64,226,453 | |
Mandalay Resort Group
Reconciliation of Net Income to Operating Cash Flow and Other Information
MANDALAY BAY | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 36,277 | | $ | 17,273 | |
Income Tax Expense | | 19,545 | | 9,872 | |
Interest Expense | | 6 | | 6 | |
Other Expense (Income) | | 146 | | (13 | ) |
Income From Operations | | 55,974 | | 27,138 | |
Preopening | | — | | 88 | |
Operating Lease Rent | | — | | 6,913 | |
Depreciation/Amortization | | 21,401 | | 12,246 | |
Operating Cash Flow | | $ | 77,375 | | $ | 46,385 | |
| | | | | |
Net Revenues | | $ | 217,443 | | $ | 159,126 | |
Casino Revenues | | $ | 59,596 | | $ | 47,407 | |
ADR | | $ | 210.40 | | $ | 187.40 | |
Occupancy | | 89.1 | % | 86.2 | % |
REVPAR | | $ | 187.56 | | $ | 161.48 | |
LUXOR | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 22,350 | | $ | 16,709 | |
Income Tax Expense | | 12,079 | | 8,580 | |
Interest Expense | | 3 | | 4 | |
Other Expense (Income) | | (78 | ) | 135 | |
Income From Operations | | 34,354 | | 25,428 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | 1,867 | |
Depreciation/Amortization | | 7,993 | | 5,172 | |
Operating Cash Flow | | $ | 42,347 | | $ | 32,467 | |
| | | | | |
Net Revenues | | $ | 112,876 | | $ | 97,641 | |
Casino Revenues | | $ | 29,742 | | $ | 24,633 | |
ADR | | $ | 120.54 | | $ | 105.53 | |
Occupancy | | 94.1 | % | 86.9 | % |
REVPAR | | $ | 113.46 | | $ | 91.72 | |
EXCALIBUR | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 17,880 | | $ | 13,377 | |
Income Tax Expense | | 9,816 | | 7,607 | |
Interest Expense | | — | | 4 | |
Other Expense (Income) | | 1 | | (1 | ) |
Income From Operations | | 27,697 | | 20,987 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | 1,631 | |
Depreciation/Amortization | | 4,153 | | 2,524 | |
Operating Cash Flow | | $ | 31,850 | | $ | 25,142 | |
| | | | | |
Net Revenues | | $ | 86,340 | | $ | 76,607 | |
Casino Revenues | | $ | 30,247 | | $ | 28,008 | |
ADR | | $ | 90.88 | | $ | 75.66 | |
Occupancy | | 96.0 | % | 93.5 | % |
REVPAR | | $ | 87.28 | | $ | 70.73 | |
CIRCUS CIRCUS - LAS VEGAS | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 10,558 | | $ | 6,777 | |
Income Tax Expense | | 5,845 | | 3,854 | |
Interest Expense | | — | | — | |
Other Expense (Income) | | (4 | ) | (2 | ) |
Income From Operations | | 16,399 | | 10,629 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | 806 | |
Depreciation/Amortization | | 4,883 | | 4,352 | |
Operating Cash Flow | | $ | 21,282 | | $ | 15,787 | |
| | | | | |
Net Revenues | | $ | 70,579 | | $ | 63,499 | |
Casino Revenues | | $ | 28,341 | | $ | 25,374 | |
ADR | | $ | 64.58 | | $ | 56.32 | |
Occupancy | | 93.8 | % | 91.4 | % |
REVPAR | | $ | 60.59 | | $ | 51.46 | |
GOLD STRIKE-TUNICA | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 4,016 | | $ | 3,232 | |
Income Tax Expense | | 2,508 | | 1,931 | |
Interest Expense | | — | | — | |
Other Expense (Income) | | (3 | ) | (4 | ) |
Income From Operations | | 6,521 | | 5,159 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 2,206 | | 2,173 | |
Operating Cash Flow | | $ | 8,727 | | $ | 7,332 | |
| | | | | |
Net Revenues | | $ | 35,154 | | $ | 32,850 | |
Casino Revenues | | $ | 30,982 | | $ | 28,363 | |
ADR | | $ | 49.87 | | $ | 49.53 | |
Occupancy | | 81.7 | % | 78.1 | % |
REVPAR | | $ | 40.73 | | $ | 38.70 | |
LAUGHLIN PROPERTIES | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 3,876 | | $ | 2,538 | |
Income Tax Expense | | 2,086 | | 1,444 | |
Interest Expense | | — | | — | |
Other Expense (Income) | | — | | — | |
Income From Operations | | 5,962 | | 3,982 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 2,392 | | 2,385 | |
Operating Cash Flow | | $ | 8,354 | | $ | 6,367 | |
| | | | | |
Net Revenues | | $ | 43,917 | | $ | 39,174 | |
Casino Revenues | | $ | 30,224 | | $ | 26,200 | |
ADR | | $ | 32.47 | | $ | 30.67 | |
Occupancy | | 91.9 | % | 81.6 | % |
REVPAR | | $ | 29.85 | | $ | 25.04 | |
CIRCUS CIRCUS - RENO | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 1,671 | | $ | 224 | |
Income Tax Expense | | 974 | | 127 | |
Interest Expense | | 80 | | — | |
Other Expense (Income) | | (5 | ) | 11 | |
Income From Operations | | 2,720 | | 362 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 1,465 | | 1,471 | |
Operating Cash Flow | | $ | 4,185 | | $ | 1,833 | |
| | | | | |
Net Revenues | | $ | 26,987 | | $ | 24,693 | |
Casino Revenues | | $ | 13,371 | | $ | 12,026 | |
ADR | | $ | 52.77 | | $ | 50.23 | |
Occupancy | | 81.6 | % | 73.3 | % |
REVPAR | | $ | 43.06 | | $ | 36.83 | |
GOLD STRIKE PROPERTIES | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 1,853 | | $ | 576 | |
Income Tax Expense | | 1,000 | | 328 | |
Interest Expense | | — | | — | |
Other Expense (Income) | | — | | 19 | |
Income From Operations | | 2,853 | | 923 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 853 | | 867 | |
Operating Cash Flow | | $ | 3,706 | | $ | 1,790 | |
| | | | | |
Net Revenues | | $ | 20,629 | | $ | 19,374 | |
Casino Revenues | | $ | 15,826 | | $ | 15,173 | |
ADR | | $ | 34.27 | | $ | 30.98 | |
Occupancy | | 70.0 | % | 64.7 | % |
REVPAR | | $ | 23.97 | | $ | 20.06 | |
MOTORCITY CASINO ** | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 37,984 | | $ | 29,816 | |
Income Tax Expense | | — | | — | |
Interest Expense | | 596 | | 724 | |
Other Expense (Income) | | (20 | ) | (29 | ) |
Income From Operations | | 38,560 | | 30,511 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 2,870 | | 2,327 | |
Operating Cash Flow | | $ | 41,430 | | $ | 32,838 | |
| | | | | |
Net Revenues | | $ | 112,408 | | $ | 101,038 | |
Casino Revenues | | $ | 107,790 | | $ | 96,230 | |
CONSOLIDATED | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 87,328 | | $ | 44,046 | |
Income Tax Expense | | 47,210 | | 24,777 | |
Minority Interest | | 17,651 | | 13,856 | |
Interest Expense | | 48,844 | | 53,162 | |
Other Expense (Income) | | (1,347 | ) | 1,206 | |
Income From Operations | | 199,686 | | 137,047 | |
Preopening | | — | | 88 | |
Operating Lease Rent | | — | | 11,217 | |
Depreciation/Amortization | | 50,024 | | 35,137 | |
Minority Interest in MotorCity Operating Cash Flow | | (19,265 | ) | (15,270 | ) |
Mandalay’s Share of Depreciation From Unconsolidated Affiliates | | 4,219 | | 4,135 | |
Operating Cash Flow | | $ | 234,664 | | $ | 172,354 | |
SILVER LEGACY (50% - owned) ** | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 3,692 | | $ | 680 | |
Income Tax Expense | | — | | — | |
Interest Expense | | 4,258 | | 4,294 | |
Other Expense (Income) | | (21 | ) | 301 | |
Income From Operations | | 7,929 | | 5,275 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 2,648 | | 2,628 | |
Operating Cash Flow | | $ | 10,577 | | $ | 7,903 | |
| | | | | |
Net Revenues | | $ | 39,298 | | $ | 35,603 | |
Casino Revenues | | $ | 22,086 | | $ | 20,646 | |
ADR | | $ | 63.37 | | $ | 60.89 | |
Occupancy | | 87.6 | % | 77.4 | % |
REVPAR | | $ | 55.50 | | $ | 47.11 | |
GRAND VICTORIA (50% - owned) ** | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 11,684 | | $ | 21,612 | |
Income Tax Expense | | — | | — | |
Interest Expense | | — | | — | |
Other Expense (Income) | | (55 | ) | (121 | ) |
Income From Operations | | 11,629 | | 21,491 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 2,403 | | 2,335 | |
Operating Cash Flow | | $ | 14,032 | | $ | 23,826 | |
| | | | | |
Net Revenues | | $ | 96,879 | | $ | 92,520 | |
Casino Revenues | | $ | 94,487 | | $ | 90,277 | |
MONTE CARLO (50% - owned) ** | | Three Months Ended
April 30, 2004 | | Three Months Ended
April 30, 2003 | |
| | | | | |
Net Income | | $ | 26,423 | | $ | 19,185 | |
Income Tax Expense | | — | | — | |
Interest Expense | | — | | 1 | |
Other Expense (Income) | | (18 | ) | (72 | ) |
Income From Operations | | 26,405 | | 19,114 | |
Preopening | | — | | — | |
Operating Lease Rent | | — | | — | |
Depreciation/Amortization | | 3,387 | | 3,307 | |
Operating Cash Flow | | $ | 29,792 | | $ | 22,421 | |
| | | | | |
Net Revenues | | $ | 74,464 | | $ | 65,652 | |
Casino Revenues | | $ | 25,619 | | $ | 23,460 | |
ADR | | $ | 124.72 | | $ | 99.79 | |
Occupancy | | 96.0 | % | 96.8 | % |
REVPAR | | $ | 119.75 | | $ | 96.62 | |
** Amounts represent 100% of totals for the property.
