PENN - Earnings call transcript Q1 2020 | PENN Entertainment, Inc.

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Operator

Greetings and welcome to the Penn National Gaming First Quarter Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Joe Jaffoni, Investor Relations. ahead. go Please

Joe Jaffoni

as Good Penn Kamika. We'll and you disclosure. as thank to review first Thank Safe the Gaming's morning, XXXX joining Harbor well momentarily comments National presentation call. questions-and-answers, first for but management's I'll you, and everyone your quarter get conference

projects, These In risks plans, or uncertainties, acquisitions, Act plans, strategies, of the estimates, can conditions, the these believes, strategies, meaning terminologies, statements conference discussions addition Private or will, and of capital contains expects, the call variations the Securities including future forward-looking expenditures, current historical words similar events, intends, of facts and Reform by should or or XXXX, risks of involve which developments, forward-looking uncertainties. anticipates results. to or other performance, Litigation by of identified statements today's of statements be within may, operating or and negative use as future seeks, or such

the and statements forward-looking of beliefs, current performance. guarantees not reflect future Such are but company's expectations

the including results on revise actual XX-K and and forward-looking the and and such, with XX-Q. or any associated described may statements National risks filings from Commission, reports assumes statements. expectations. are uncertainties company's with today's the to Gaming update Exchange forward-looking publicly news Penn vary in the in announcement obligation company's The materially Securities As Form Form no

as within on SEC accordance measures be the website. Today's financial as the call G, GAAP of presented directly to measures non-GAAP required, will press in and today's in meaning of company's most financial webcast calculated all a measures release found can financial well and non-GAAP include the when Regulation with reconciliation comparable

Snowden. turn patience please now Thank Jay, Company's with the go Jay CEO, that. to It's you over ahead. to for the call pleasure my your

Jay Snowden

times. of first now. good you everyone. call, we hope appreciate everything our quarter right all on Thanks, that during you And families what and are joining on healthy Joe and really going Really earnings safe and unprecedented with your us morning, particularly are

this Financial not Probably feet Here how our we're And part. on Williams But X on with right timing Chief his is course the business terrific team on excited call appreciate six your us he seated March joined have obviously the to me given contributions your from new first on earnings your away. present envision Apple, Dave environment. you Dave. outsider morning Officer, current the to early and certainly and perspectives now of you

team are joined call I by who also to your couple upon executive have I'm they while the navigate of to help later in of over call me may senior morning as been always this particularly questions. of and our who invaluable some unknown last other members we answer months the the

stakeholder to outbreak. our weeks a we've on detailed the measures in earnings liquidity and and begin last response our enterprise-wide this to over through several To releases, with report undertaken we maximize the mitigation preserve release, the morning's letters SEC filings, press have COVID-XX provided aggressive

you will spend time from momentarily won't already topic. hear of that we great covered but So what's a Dave reiterating deal on been

to And have and dollars the friends' our all put and about talking lost valued three heartache cents. just the coronavirus. feel loss. Tragically, by sorrow this have Penn around words course, of families' been I'm of members we it's not at into we others team many Like their pandemic world, the the to for profoundly we and and impacted own hard

and life sacred all and Certainly are. times like how reflect on friendships truly we family these

care as day out workers, of front in Our are essential all well the battle lines affected our this and and by those we responders every this bravery of by health as hearts cruel first go personnel to And applaud disease. the our amazed volunteers.

their support ongoing to our doing efforts. part We're small

been In more gloves surgical local leverage perishable the relief and We've XX than sanitizer help hand of efforts. also properties in addition items to to donating have hospitals. thousands we to masks, of able food tons our donated to

our provided almost casino XX serve share two our sites of our food COVID-XX in for Greektown our to several centers. to first distribution of example at hotel, course we've and of has also Detroit floors proud rooms free lots responders that parking opened properties and up as Very charge testing to of

who an times. honored most in and their to time and of our during truly such these selfless alongside in work Penn, challenging team members need energy amazing help to group have those I'm at volunteered communities

I and first some to quarter liquidity. our it of review for the now financials. over for a around additional hand quick detail results will Moving the Dave? Dave to

Dave Williams

be good swift I quickly and liquidity. efforts Thanks, decisively preserve glad to though team's with our to of company regard and great Penn. I've leadership joined here been move at ability morning, everyone. the a impressed Even with I'm uncertainty, at began, to our particularly to time pandemic the Jay once

and our strong. the Prior January results pandemic, February very to were

XX%, introduction We ahead with in betting several properties. at growth sales more of sports and of property growth are retail of well performing by EBITDAR mild same-store driven over X% weather winter every over expectations segment and the

to While just we've as all Jay said, measures the did we rehash taken a since closures, won't want our highlight I mitigation couple.

landlord to Las in with providing sale. GLPI Penn ability property, ground on of potential the following real to the $XXX.X Tropicana the credits entered them our see eventual lease rent estate and some Morgantown our into upside and a sold we property's principal with First, Vegas assets million

and of fees, thankful relief among state those expense abatements others. the tax Second, to we reached regulatory and local provided license governments, have out and property form who in are deferred assistance

business payment with work their for to thank extended friendship, and and support and willingness terms we them long-standing partners us. our vendors want with also We to

to $XXX.X balance sheet. Our aggressive finish allowed of mitigation us measures on cash the million with March

end cash rent be credits. closed we $XX the hopeful will of end will properties majority the of early million some While our all our properties by including through the or monthly the of on are if approximately operations level resume of year, May June, remain burn

Once revenues. quarter, first our that capital can and $XX in estimate we XX% of and $XX an January CapEx, spent on February. on properties approximately EBITDAR maintenance the break with even basis primarily In expenditures reopened, prior million approximately million on to XX% we project year

the Since Category construction greater earnings on have our the cut Pennsylvania. future halting market. including into have projects closures on the plan CapEx revised two CapEx we you our in four on clarity we update a We call, once to outlook

as development Our to do term short EBITDA invest spending can ramp Sports confident, time our to in up that to our projects the Barstool We our until generate continue conservative build-outs plan aggregate we're will properties and expectations. and Barstool Colorado remain such million books of sports our $X the including estimate the branded cost approximately at books our million. retail in the casinos app of of the including to $XX which will we sports betting rebrand existing in our and Michigan

covenants XX expect April with ends and modifications. XXXX. were amounts with in period at provided that and $XXX XXXX our agreement test existing in period. $XXX XXXX interest on coverage through We March at July by the equivalents replaced XX, We compliance covenants amended as and to to April starting April our On leverage period. throughout which the we cash with XXXX were be for credit in XX, Finally, compliance XXXX and minimum of cash the XX, requires declining liquidity the compliance million of a minimum test covenant certain million the which March XXXX we liquidity covenant waiver

back And I it Jay. with that, turn will over to

Jay Snowden

what ahead is my All to this coronavirus balance like the we to Penn believe holds the us. for crisis Dave. behind of right. Thanks morning, time National, I'd transition looking future focus the and once

timing end June to of significant offices frame properties of begin encouraging would to May, early as exact time resume hear for uncertain around is an a referenced, we've country Governor's of operations. Dave the While indicate that begun number news our some to out

certain what at else everyone will limited a bring. not this we're reopening stage, Like exactly

welcome value ability properties the very been and to. direction the one members that a much is guests positively look team we've safely and anticipating in and at right our However, forward step back to

diversification. we is One the have Penn at key advantages our of that geographic

and states across a revenues more from basis. as and states than operations of spread positioned on benefit begin with XX% single sequential open see significant -- any While well should to no derived state, casinos we're XX our a

team reopening, they by has working for health members social Vice that organizations developing on our new President distancing diligently when appropriate our of procedures our of include George, team preparation and been guests providing by hand reducing These Operations Executive and regimens, one game Todd our seats restaurants, comprehensive for other operating other protocols table governmental reducing encouraging team safe measures In include standard keep and our slot wipes and return. amongst our led with any to number play and a sanitizer daily of sanitation the the others. and cleaning PPE in number in at our installing of casino seats number use the and stations around of time, machines guests members increased masks and regulators

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have and a reevaluation well structures experience. our enhance we by guest way improve practices efficiencies serve --operating customers that advancements by to focus continue technology in better the this our We as pursuing used and thorough casinos to corporate on to a property and time to can reimagine how as key will of undertaking our

as in process mychoice are of the expand covered upgrades in the to of release. industry-leading making our the We meaningful also program reach loyalty we

development level of our is of sports back help Sports the market the customers Barstool's as are third allow We schedule that and we've of and Barstool should quarter hiatus. our anticipate addition, drive of sports live able XX a the will across database has product playing over million in ramping XX this marketing In time. field to likely the book audience as brand introduced share We Barstool be on and fans. meaningful world casino more to to continue around while growing believe been million launch up engine an on extended on been the XXXX app us

online of social and more content views. commerce being April creative home represented Speaking to live and blog for their their of and speaks I lack of team the media Nardini and highly Barstool's at new loyal brand sports ever generate engaging it just sports. also think to Barstool and about continued video followers Sports, which than Dave in the growth their Portnoy, have best despite month April meaningful Erika power in with stuck

series million weeks. generated XX Unboxing several gift regular alone has Portnoy's Dave over example views last X-X, XX, over an the As

to including explosive Lastly, Dan of recall the Katz explosive that streaming met followers, and now with growth I in Dave utilizing was last live has reach game introduction success million when with And followers. shown summer nine Erika absolutely its TikTok over on so number emerging Barstool on continued and platforms Twitch. growth expand around XXX,XXX I video

of XX% money growth loss experiencing Interactive to sports to Penn retail momentum both for results March from the growth gaming in delivered and April revenue with That from Pennsylvania Interactive in strong revenue into quarter first in over which for quarter beating EBITDA the and similarly XX% month-over-month carried March March. Penn of has products. the those social experienced impressive book growth budgeted second with revenue with April revenue despite real our most

experience the be database new will offset our states real our competitive to early Pennsylvania that help results seek additional reinforced and as online operating Our as money expect and authorize to accelerate from casino coronavirus. is something advantage view revenues a iCasino capabilities which the we true in states fallout has see significant

casino of ability is sports combine database very for you Barstool our with looks omnichannel in along betters opportunity states products the the where monetization this it differentiated legalized, database strategy promising to future. the When Sports online casino to cross-sell

want I closing, at to just intact. covered I've high In exciting Penn story growth National's long-term a emphasize level that remains fully as

have ability on work execute and and accelerate everyone I'm It's several Penn last in for the opportunities weeks the innovation our unbelievably disruptors. confident here and challenging agility, team and entire I'm of has ahead. these new the the hard reward times While like our been often industry, at that proud shown to

have proven environment and place like for an again We historically that will this. thrive Penn in comfortable is us at a

questions. to it Kamika I to will up the open that, to hand you With audience off

Operator

our the question. your line proceed Greff Please Instructions] [Operator is from with with JPMorgan. first of question And Joe

Joe Greff

addressed Good going your ask to about you morning appreciate Thank everybody but I and prepared comments you. breakeven I revenue Jay. breakeven was levels that. EBITDAR

new side? that your my at does pecking really sufficient cash to related is are options And in you capital million to guys position? topic get How equity to your order of where bolster other options? the to equity-like sit here lastly liquidity $XXX confident additional you the is available liquidity extent you So then to are or the are looking other to the What liquidity.

Jay Snowden

the asking for COVID-XX our today. and now. pretty in negotiate were significant is a creative principal outbreak. our immediately and about liquidity Morgantown with rent focus companies action mandated a think overview, to good all close you We I landlord to we with mid-March And liquidity And Joe. for continues to provided obviously due Sure, Tropicana appreciate to question. immediate I feel we right land but we solution after up properties a transacting be relief high-level GLPI, took and our the Vegas us provided by we Las that And started assets. the came profile

flow. And mention have debt it's we like sometimes zero That significant valuable NASCAR. assets I think own our property venture but XX/XX has on that Speedway with that do Kansas and it free would property cash is also and I generates joint we lost, that a

Prairie consider asset is options So whether State assets. our we do in Gaming portfolio. of sale-leaseback or wholly-owned recapitalization a have you

significant and are in are and interested in engaged -- those holdings developers have markets. real racetrack We our in estate Texas through Florida in actively with land properties that land

do of we number So options a have here.

The of And whether last of continuing day to about open. guess side, our transaction debt we're the you to. the new all on your capital have the convertible, are that's And of been good news consider will and options instruments. is question, too side, read the markets look And every open. to equity continue are part course a I markets

as We end of calendar us math you year. through have the liquidity this the gets that do

reopen that limited have is to given be to way a weeks basis. early in number and to property second in half we what visibility any anticipate do reopenings scenario are And June, we coming really that of May on states the we a draconian think don't of a allowing going casinos

likely. in scenario, pass end just as the to mentioned scenario liquidity year revenue a are continue as zero in that the consider you've But options, year. our a don't end which through see markets I of several that even So we we we'll between of have the capital got now which And the and well. and

Joe Greff

the year? nature, the on referenced in burn are in they're launch correct over million one-time us then per Can those to for remind Barstool month you average release? development I And launch wrong that if and switching that book presume $XX today's you costs Great. of all app. Sports included what in this cash I'm

Jay Snowden

Yeah.

hard product They're a work But XXX working now a Joe hard. of on that an still versus have course around We remotely right over team engineers. little developers they're working of in all They're and to office. all product. continuing

my lost on and what costs that side time launch standpoint timeline. a development cost surprise team is below such obviously the payroll the standpoint by I app build line. any continuing incurred costs additional you to tell ground until we out and of are engineering as to the that to would we the a from haven't the environment. hit would a associated and more I delight on tell haven't any transitioning And remote we you we And

So impact short-term. in the going you're to EBITDA that see not

not and the continuing currently that investments the opening million the launching to sports casinos think app that remarks at rebranding we're well his app make to that our development that as as the Barstool-branded we covered ones between Dave brick-and-mortar And time we invest and of continue branded. are launch now to in $XX around that books in and in Barstool

Joe Greff

you, Thank Jay.

Jay Snowden

Joe. Thanks,

Operator

you. Thank

Allen Morgan question. next is line the Our Thomas proceed with question with from of your Please Stanley.

Thomas Allen

Thanks.

a operating or you Just can lower? breakeven when we will How measures you're the structure operations reopening? cleaning. help but think think be Thanks. the You you think around casinos side, should cost about cost Do of thanks incremental on it? higher the the numbers, highlighted lot us for about of just

Jay Snowden

the you we think open if as generating Well, it's current we're that assume at are believe breakeven year XX% of EBITDAR revenues XX% safe it's and rates pre-COVID all bit or that reopen because we different, that have of mentioned property. the Dave level consider at off once non-gaming than threshold different to structures cost level hit a having where closed. prior But I they're just that and nature. properties environment by property and of better things tax Thomas, the our amenities to that Property that and properties course,

obviously, a to terms reopen we're, in look taking thoughtful how and conservative the approach. really be going we And we're of properties

So furlough aren't pinch as hopefully in team we too staffing overwhelmed, our are off the up in but prefer more of maybe where to understaffed expectations. opposed model a that we're and bit back realizing calling we our that much revenues heavy meeting members and then a of

OpEx our spend XX% ramping revenues So they're adding obviously, seeing these and and if our you and costs of CapEx like we to both the expectations. only understand go we're beyond assume our balance/imbalance ramp happens, businesses what see will we supply-demand And that on as reopen, that only can XX%. be as going looks that business well to side incremental we're

what that's guess answered -- your So question. hopefully I

Thomas Allen

Yes.

most can then have that be Long-term, everyone the right? than that Sorry, you more line, sports per regulatory that Or do efficiently? Thanks. do are think before optimistic on will higher? incremental should or on has I mean states any And just what as you worded follow-up basis that better. affairs for a they these it costs iGaming people costs So do think and it's lower there if learned be to going they were my Jay, around betting? you casino operate legalizing higher are

Jay Snowden

Sure.

the of way and question Thomas. everything to we answer our about and incremental a about how that going months some costs we standpoint. where to sanitary what is from say from reimagining. it the think you are we're that we're when two rethinking, And tell business taking would we that that thinking would But also we're your do you we're measures there's I do I some obviously be sorry I misunderstood about through. So first and that today the cleanliness ago today time

some to opinion, spent in this just and company is you number And still we and year a blowing a in a my postage. $XX mail we production direct a ideas talked but as technology give enhancements, almost million as company still about mind we

And so move forward. to you talk about opportunities

two isn't Microsoft I aren't economy and all and about Nadella's months. years' during with and emojis. grandkids grandparents that worth out And think that of Satya there Zooming their with the been two there we our digitization of of the there's last e-mailing comment agree earnings a sending set in texting

So for payroll. this the like more around transacts technology. to operate only us goes beyond It things still opportunity last that out goes efficiently an industry well in cash. We're there probably

So of accelerate regulators benefits our payments with digitalization really properties, see our if to we're amount a which working this can now tremendous of brings right us. to we on

how and go-forward well. our we been from to to thoughtful really So back a operating and rethinking We're then, of at corporate as the and standpoint, ramp that do doing going around like model everything need basis. on labor we at the property a up, course, we're looks course, be level, had level what of

So have it the it's net did of all to but businesses pre the find looks and that more reopen like. than to these can we're we see of that once what how going they doors is very I and profile understand fluid think efficiently goes demand that you'll operate COVID,

having path. in that even with betting it's iCasino already take would time level I certainly urgency active what you sports efforts, versus just example, question to think legalization a more implement acceleration state conversations an in gone Second that considering I of legalization today. of to pre accelerating maybe states the some for And your not now tell states of there's that very the at interest There's we're as of regard as sense it and part of legalized down and line have was well COVID. Michigan have states right

a lot to our jurisdictions. deal sports I So are tell of conversations of because interest great to betting without getting most not accelerate a you iCasino across into specifics state-by-state, would of there's these public,

Thomas Allen

Very you. helpful. Thank

Jay Snowden

Thanks, Thomas.

Operator

Thank you.

question. Our the proceed Please Felicia is from line with of with next your question Hendrix Barclays.

Felicia Hendrix

in to morning. book And Good nice I because out $X it's Hi. actually CapEx want That I'm you hear the so not on a million all with was the Jay. to this is question of branding sports million just start your cash to morning. that burn? $XX sure of answered clarification, earlier

Jay Snowden

cash in number our yes, That is burn Felicia.

Felicia Hendrix

are picture, guys just already? what GGR I we the and you Okay. you're how openings any you and And for from back taking it that simultaneously thinking mean, have to the about your unemployment. recover lessons high casino also as are the well, you know there took Great. that correlation few look opened Thanks. bigger then a just wondering if thinking time casinos regional was economy? if away then about to And

the this before, to So or do how likely high your what rate And drive casino the see with was you than unfolding unemployment are demand recovery regional remain time? to higher generally? plans it

Jay Snowden

much can in what the they've precautionary I look are similar look things And sample limited There's to-date. -- Felicia. considering up preventive a question my there's COVID as to Great that And terms as they've taken couple of very reading Idaho. and very on d'Alene we're or the Yes. go reopened have prepared in in we're measures covered to that Coeur casinos And of that of remarks. off tribal around done. we

go, versus six down, lot utensils machine can there's other seven or slot are you every sit turned two standard casino or three envision disposable that on games limited And more nature. maybe that a of seats is things grab open and seats, a and probably restaurants table off a the basis

our going want what sure those We and are members -- the feel that's make people really we guests make for a create all So comfortable. safe decisions and that what of and our for that environment any to to are team we're considering.

read team doors positive been demand reopened that's been side least and responses their social in the and both very they've Idaho feedback the the been And media strong. you on with casino I've that the and at has side if member reading customer as

we much think you And like lot good openings our can whole I also a casino is to state-by-state. the last very one aligned plan, going have with feel market look the or few days. reopen we're when how So from and regulatory we about extrapolate partners be and we don't on to leaders But state plan. in a two different. every feel

could about and ask businesses Look then how and question answers do have people ramp question. call probably you we XX this your on potentially these up, to back that different

We we're working have our through to modeling that ramp and staff businesses what that profile we as own staffing obviously we understand once the and demand going go we're up these looks like.

We're around be be ramp going to to is revenues really need thing just businesses, and but about how do last profitable only customers. cannot these up and your cost marketing as are reopen where you way just structure the the you to up. you that they're it smart you -- And a ramping in in to really continue thoughtful how where buying to your think be world position And our wars. do I a we think market you're want business in

goal And of is you're quickly cash. get cash, continuing we're burning as point where to not so to our possible not to course as burn and a

And I mention actually back if do, recession. post-XXXX just I that went -- this bounced most as is happened to and but a markets on -- thing last the XXXX back the and regional And I you'll and recall, the call recently you know Felicia during pretty think we quickly. what would team know

percentage. were regional and XXXX markets You up in back but double-digit XXXX XXXX saw X%; flat declines up XXXX, by XXXX,

post-recession it a So was positive of the in single-digits. four-year markets the and regional at CAGR you low look

to drive. our within properties encouraging XX in me the a -- that distance markets So XX that's are XX-minute comes XX customer and of to it's are

it think in air to I to post-recession. is which to longer case recover this much longer like take recover It's going not travel, took

So safe of and whatever the focus in we prepared important for sort profit, a doing us. thinking way to how this that's we're generate levels is in that about a way on obviously are it. can and be a We'll that's our business

Felicia Hendrix

on about flow if all rent And commentary you're higher. on you after breakeven just on follow-up the breakeven Thank my thinking obviously breakeven cash a obligations, for free that. corporate then that basis and is

wondering -- just ramp think about putting quarterly also Thanks. then shutdown on that? period, a as we how then run into And calculus, thinking just the quarterly corporate you that should So during how but rate expense you're up? about

Jay Snowden

cash tackle cash variables free the ask around flow Dave breakeven. second Yes. I'll flow one the to question answer free your expense corporate I'll and then around around

through On is side, revenues still businesses right going reopen it's -- working as be expense the our ramp that corporate corporate models going as now. our ramp. And our we're it's to and expense and to conservative

was We mindful going think even that when be it to around assume And safe lower levels have that get pre-COVID it's I to and to corporate to -- our we thoughtful be revenue of that. back is than COVID. back XX% pre XXX% to expense

So I we're working on whole that. don't have a lot more to share.

Dave, breakeven? a the structure expense, share but free on of lot flow on the track conservative ramping will variables the earnings call cash about to can up you with we talk cost more corporate I be properties. it's going at like thinking approach much assume have the way to we'll a about and just that as months Felicia, next we're the to want obviously We our think continue you

Dave Williams

We think said, Jay Jay. Sure, rate. as unknowns when and at there's I lot a don't going to Felicia of what here. we're open know

that have also we to at So a property-by-property basis. look at

that at significantly making much cash tax until have I ramp up of think becomes flow we so now we to lower. free our going the be look cash if we complicated. are But up pretty And what components it

to I as are be going CapEx minimal. said Our

The know earnings interest our that you rent. in and expense it's you also the know

year's closely. able our reopening able we're most you be cash there. think and can Once XX% manage to talk to on to revenue manage achieving very start about going be operational even manage get I, to of when So, the we'll to we our very last break EBITDAR way XX% of carefully to going be we're efficiencies properties to able that and we

Felicia Hendrix

Thanks Dave just you. from is The it behind gets and probably here. Probably worse welcome. better

Dave Williams

you. Thank

Jay Snowden

Felicia. your Good voice to hear

Operator

Thank you.

question. is Steve from of the Stifel. your Please Our with with next Wieczynski question line proceed

Steve Wieczynski

guys. morning good hey Yes,

to But you your Jay Barstool. a you costs I question wanted to about and of bigger transaction upfront And ask wanted think this those So, materially I did retention acquisition of as costs. how picture environment? this about about understand ask way guess you lowering a kind especially in I

Barstool at being is what back betting And market shut assume I guess the if to will I And how to be sports sense. some have out betting that customers there you opens here of market makes hope I'm giving stuff of all online and the kinds ultra-competitive. react down up will are competitors as your I'd of that getting sports guys away environment? type with to attract that

Jay Snowden

we It And a again. are It's We to don't right? does when sports be going live good don't know know Steve. question.

states at We also point like? to don't a legal So, look lot are marks know and what there. how question set of many there's does that competitive be the going

investment is this tell would way that And we I to feel we January investment. Barstool. What we announced our investment this them that Sports the a said made XX% you XX of investment that structured to strategic is benefits an couple Barstool when in we on of -- and so strongly many is we there's own

period. and with related partners for to sports on basis iCasino are Barstool exclusive casino a all betting But go-forward related things we anything

with the at And of Penn for aligned equity our from well. Barstool folks is good that much we're very we get because Penn there as own Barstool good so what's XXX% and partners attention and for they

the fans. their million that million. was XX lot And much So, than It's from a we really do that that number so aligned all very and official last of there's to personalities relationship envision and ways and many those we're very you the fully have Barstool and think all on last they much Penn year I content across so playing had XX and of compelling out platforms Barstool. really higher now. all integrated platforms leveraging are can being produce very unique. at they their And

just continuing people can't. ways have a loyal they great market but there's are things or have have do followings that we strong may product don't So, our that They can that behind that to brand others together. that platform a simply brand necessarily

else general due to the in sports Barstool is and our and there our than way operate So, that more investment betting that relationship we anyone profitable book long in can think term. in out we over a mobile sports

won't And app reason to you course to stay we be to needs standpoint? first viable. in mean I promotional a mean that place. the come does to that from Of your have compete a not. There

so going product acquisition be there's of to typical and launch. that's costs And any new

the within time that excited development as app as But you to relationships very that that its the at qualities is with very of about everyone be differentiated building something think that our I'll work features we're app how that's about truly going envisioning but to another share are bespoke us. and on we continue to I'm and exciting

states And cases remember get have Maryland state those into to XX XXth operate in that can some Perryville too don't than fees that with in pay we for five you in with and between fees percentage because option access higher an of anywhere we to to access cost revenue. XX

that we friction don't So, costs. have

also players we and PointsBet back we have virtue we because access FOX we those agreements not the the that like partners have skin from them. of we and revenue that that of shares do then have betting potentially others DraftKings costs of with Bet sports not coming the us licenses have have friction some to And only by

we matters that we the said and and a share every time. one? to that player we're say a that get on we're take think going expect level. real talking day betting as Will be margins. be again market doesn't and long we as I top have ramp we environment three but sports in know state competitive XXth, just January that need be going matter expect this -- where the to And it not to to to highest it I time but one day operate date period. about profit to at which to So, look But to what we'll think us it's like that I up looks don't promotional see we

Steve Wieczynski

Barstool. of if sure couple to you're there And know have was looked us last months? like to second going I'm But the sure helpful. over That answer with I'm to very help the think way Jay. yet Thanks the what not not any you're advertising this fully about there entrenched and revenues is question

Or in you get I'm have to figure with And I their seen strong is pretty out presence -- resilient? those trying kind online have environment? to here this of ads trying what guess been given any material slowdown

Jay Snowden

Erika been most to answer resilient no way continue see with conversations it if are certainly it's there I Yes, In would than more shortage my you that companies. And this content Steve. I of think digital media you'll advertisers. consume Barstool

changed. have them of Some

same. stayed have the Some

my be to they has creative every their their So, business and Erika But I million and I nine in blog are company Barstool. at you about continuing they prepared social are they highlighted are video followers. as are would the think that me as blog differently think excuse around and -- run tell their media video to remarks TikTok business. always through roof had followers as I team Dave how But

is in for which we than -- launch us the in been is better it's today exciting their this as about So, ever obviously coming later think relevance very quarter. up third

clear performance. not and their And appropriate it. now. And time. as businesses the about right the making I it to all talk they're Erika I'm adjustments have all are visibility financial concerned about I

Steve Wieczynski

Okay. I did I charge the the this impairment said during related $XXX what that you say housekeeping quarter Dave And ask can question? was million But If to? a you apologize. Dave

Dave Williams

million goodwill. properties it. we charges what us $XXX assets test trade related And accounting event goodwill impairment basically of of a to into you total recorded the closures is to intangible names, do a of I the under our that a gaming and literature. had get of and primarily licenses, didn't required I result No, we a tell of But the and that temporary trigger can as

Steve Wieczynski

got Thanks guys. Okay, it. you. Appreciate

Jay Snowden

Thanks Steve.

Operator

Thank you.

of America. line is question. Bank Our with Shaun your from with Please next proceed question the of Kelley

Shaun Kelley

on was morning, dig a everybody. bit little state-by-state deeper the bit if we Jay, just Hi. Good could dynamics. in I hoping little some a of the -- of

So two-part a question. maybe

around all, June. in think then early May I broadly towards First some about here end talked reopen month for you the of and of the ideas the

phase. you circle of think I of soft Louisiana; and a more states I watching been then Memorial Mississippi mentioned out kind target. think, the specifically? has are could mentioned Day But Yes, different what in we've heard some be commentary coming

start. Just keep in just to tracking going for be because all we're handful an great states would on to this kind investors real-time a of maybe of be eye a

Jay Snowden

you tell been that. I I very state some officials it's and regulators I mean comments are And mentioned Shaun. the authorities states just that very, you fluid. had can, public I'll you And and would think hourly. we're Yes. tell generally conversations there's around being I what working health and our with

off So Mississippi, talked of Louisiana, those I Memorial think have go can target. Day a maybe you about

got like state impacts or Not properties cetera. every the then And in COVID in of have you've looks look that rate that of a it created death when looks the same it and et flattened out terms is flattened Midwest what impacted number curve been just how out differently. the

So we're all staying to close this.

can I think tell best the that's you. I

model I outlook. bulk would the think today say or live to getting probably in the if probably sort safe June. I states and likely would where that. in an imagine to think five reopening limited go I remaining partial to I we of specifics somewhere without two May. be of it's states capacity that three And too in that into And much to between around see had be you'll operate exception may some There

Shaun Kelley

about varying gaming proposals And relief we've and for the tax some follow-up that. seen helpful also states starting operators. the and appreciate I That's is then potential to talk for

the have in there some on that of I I'm piece. taxes at credit been discussions of then around in proposals or Atlantic I and aware removal Louisiana some think are think of the out City taxes or some two promotional direct least that

that a help states? you're in about with on a try revenues flex seeing Is some side talk you to be on? desire coming And healthy How bit that? flip obviously, a you your Because, got little much get dialogues they've in more door. to this industry. Can of and up tax it the something the

going to you be to thinking two about that competing that's when So balance out. they're got helping interests they've

conversation apply that it could is where how just for So going? Penn? And

Jay Snowden

have discussions Yes. a around start our number of general to-date. local property cases. terrific and partners There Well, and there We've been standpoint been and fees nature. -- relief abatements actions and that have been be in fees of tax received that let continue license relief saying have a tax regulatory partners things from in state rates and by me to

So tell natural that active. very that There just is you I would tension it's you described.

state. same the in not every it's So

other they the states tax states don't. tax-free high. rates they are really And you Some In give credits. promotional

discussion I that you be tell but that these of of think has I would right states I or some on mentioned obviously and anything the that this point. topics daily than we're that for dialogue at continues active so And in to anyone table others, isn't active think conversation having else now more you are can't

Shaun Kelley

Not be performance. Like that? a be that And the nice least level switch maybe credit something us? Or overall material Is the the on a you tax be at like to could could impactful could for as would dimensionalize financials? promotional Louisiana just you last like that job? how but that for the something like state when overall to

Jay Snowden

is Ohio in with generate terms Louisiana of where for the of the states us. right largest there And for revenue us portfolio. important a operator super casinos the Missouri Louisiana. in and most state look Well Yes. We're it's we in

certainly of the but It's us don't and think a where the material dollars of and I for not rest like at the that just meaningful happen. number the opportunity at millions given presence go. us be corporate see as Louisiana would conversations year. -- level, for the in in level front per that me in assured we'll would if but I it's have is notice you well it So that state our just it something

Shaun Kelley

Thank you much. very Great.

Jay Snowden

Shaun. Thanks,

Operator

you. Thank

with the of from is Please SunTrust. question your next question. Our proceed with Barry Jonas line

Barry Jonas

morning, your good to you could commentary do what think a on level be Good guys. businesses a at guess impact Jay higher from the more call this term longer of maybe Hey. lot I the crisis? but

Jay Snowden

thinking We years. year, come X.X where the EBITDAR all Yes. one pre-COVID for no different that just And would way completely can probably scenarios any because think in to say were. one were they in that tell it. I we we're levels XX about you the where sort get an we preparing those. maybe revenues That's of where we're Barry safe about they I back think that to we're think of Look environment knows modeling don't and our exactly. to back Barry,

look have from different year in we're what's make structures to try we to try XX we like, manage this a the versus from business we the that the to as solve as next under we variety What historically is, what our done we and from that decentralized everything go business, as for in from scenarios. to we're of XX from corporate can continuing run boarding centralized profitably should standpoint, to what property white how decisions can to to are XX Revenues XX. technology a XX order to

But even through working still order of EBITDAR we're that. get to were generating the to have were generating So back be pre-COVID. XX% we that know that just we where in revenues to don't

Barry Jonas

just option see markets Okay. the for the GLPI a would to need a then get nominal market I And question for amounts. a want today Is assets to what guess go That's announced? license terms full the great. beyond betting And maybe then deal that is to you this you've that not to somewhat new City seen Perryville enter in of sports but for exercise we've in you b asset? Atlantic

Jay Snowden

right do are that's obviously way been think one now on primarily balance and that in good will last forward. to something and going a of side we fortify mentioned Well for you're here's we're the that. we've really we is liquidity a is on we Perryville us. it's look to to be strategic strategic us not great environment that example forward doing that make and as ensuring but whether think this brick-and-mortar continue for a further move investments on about sheet the the COVID thinking call, got is as -- we fit the I or about M&A is focus M&A and we But I

can several give upside and was that the of is on maybe casino we've you Michigan not sports valuable that of access side. in have access than synergy nature what with owner But the you about to more online that, so because you generate things Greektown given where higher those opportunity great for a you been talking think a EBITDA opportunities. scale previous brick-and-mortar last of this quarters example it's you that the to betting and importantly, just

to need to from that have forward we sure liquidity We we would make to on Perryville, to what see do move anticipate that. appropriate we to we that option. able So if obviously until have -- execute that on the forward we calendar moving that end announce XXXX we're have have we the end the And option of year, of this option. by being on

to can but that we a to ourselves that's access some importantly, time, access significant buy we So population today. don't have

have our joint we available betting are iCasino. to access specific Atlantic do in by City, and to standpoint a parks New virtue venture Jersey for there Now of from Jersey Freehold sports skins New racetrack with at the

anything, se that City we to do strategic now. So Penn. we're But looking on be right to the anything a fit for would would assume M&A safe side have per Atlantic at not brick-and-mortar in

Barry Jonas

Thanks so guys. Great. much

Operator

you. Thank

Our with Instinet. of proceed next with is question. from the question your Curtis Harry Please line

Harry Curtis

to in In please? strength questions comments customer sports commented around of your with Good to of of a quite and give strong morning, part, casinos because and respect Can the visitation you sense written everyone. Two in incremental you the betting. strength that per February me. for metrics that were us January some spend the

Jay Snowden

we table XX%, last good betting single property fourth decline that -- pretty even volume and growth And -- some fourth property Sure, Harry. slot beverage years. that digits food and low grew had by been of of Ohio market a in XX% of growth win business in and at in virtue competition for a saw of sports XXXX. quarter XXXX And quarter that betting our Lawrenceburg fourth the around provided no in actually our of in sports Hollywood call quarter we detail on in game

me. I in property So yeah, we of had just sort just of been glancing those the here results are environment. seeing trends during you of at front pre-COVID that tell the would kind

in Charles properties sports larger books their Vicksburg launched relatively in sports East have properties you Chicago; If that the book two have as consider in four are sports property and our property West Mississippi. such Virginia; newly our Town are books There that properties our and Indiana, new. Lawrenceburg

revenue results and company. that February properties and average double, for those four at looking shared for the January the You're results as are Dave for EBITDA you with what

north XX% So of you're year-over-year and XX% revenues to closer at that that was EBITDA looking growth. were

not results the think games due books Now, that's table good. largely sports is and sports and really flow-through entirely drives that the it of you're non-gaming scale that seeing I I'm properties to side on the that saying have betting but

Harry Curtis

liquidity where in but goes -- question you you Very was to the behind permitted that good. second long reopen that two to are you knows but my casinos expect design given Probably in the your Pennsylvania is? the gaming then I you construction. reasons back halted some perhaps also driven, -- the And and last, how in casinos expected casinos positions who you and how fewer ROIC what the rethinking invest interested when will what

Jay Snowden

I slot Well, everything. And Harry, all aggregate projects about mean, yes of the in good reevaluating return is projects, the before betting and those we properties of number about shared and are very we absolutely. and non-gaming marketing and sports gaming that we we answer. think both we've we're in amenities and structure how are of machines offerings how the food thinking the as those believe beverage efforts the layout but

forward we're believe announced we yet these than the facilities things and ROIC forward not that those was moving on we're we hopefully it but are two moving would initially it's with table. the is because that of very construction those And when we All expect when of projects. two better similar if the

don't have we'll good that in re-imagining re-imagine are is them there firm we feel company. and we're still liquidity king line. Obviously about the time two projects a But So, right else now. everything we like

Harry Curtis

it's follow-up, sometime Do a probably that that, -- is as just think do this year? restart it likely you construction you'll next into pushed quick Or you think year?

Jay Snowden

dependent It and lot looks have factors opened. businesses many XXX% cash ramp on flow And there a -- like There's how flow. free what the of cash Harry.

about the have we're ramped. how feeling good I we're the year, of build-out things the before of end really forward moving with those think, if properties

the our expectations. properties successful and our in they're to COVID environment ramping opening and we've about And been up safely

So a I don't on want hard date it. put to

Just know do these projects profile. return that we believe in their and

Harry Curtis

thanks great, Jay. Yeah, are signs. the those Well

Jay Snowden

Thanks, Harry.

Operator

Thank you.

with question is proceed the question. of Union your with from next John Group. line DeCree Our Please Gaming

John DeCree

you prior of get think, those Two, don't gaming something mentioned questions. reconfigured revenue get EBITDAR But should morning, science can as much a to to utilization, necessarily fewer an How capacity Good back Jay. capacity we like comes have levels but kind other Thank exact how ability probably back to you you gaming question table casino need capacity. you XXXX, recent my for to gaming per get And with as think every that capacity less demand? slot it's not everyone. online? One floor exceed back or you gaming I levels. about to we about taking on, think being to in with seats the do

Jay Snowden

and tell you how this. we Todd would but and yield to team I CMO operations best the of times certain to we have in about that to our have think customers going supply plays We're how this ability and and offers Yeah. available out day we're have, Jennifer our they all can about, participate do see -- John sending you thinking worth Weissman so your or to based come during of on days week. maybe

if yield you're to inside you capacity standpoint the of, limited a be how have do really thoughtful from you maximize And your casino.

market-by-market -- that state. and be state by So might and different

Easter And ever honestly for be will decades properties our they're of they to Some need built were Sunday, ago. than bigger again.

up to the XX% energy. but still So fire off machines us you're and it's there's good pretty feels take loosen easy floor at for maybe, your capacity of and code

higher XX% equation. certainly thinking then But at we're through than facility where slot others a plays of your turned see if off. have machine generate all lot of in going probably -- It's worth more And to average it's got you even higher be on to you've going probably a yield that out. every demand. this capacity in But could to that's how other there's XX% We're customer revenues.

John DeCree

additional guess the interest the about soon to it Have quantify, payroll quantify credits too think helpful carry guys be it, And on tax backs benefits I one might or relief Got of like CARES -- Act now. but some deductions. that's you for question to able been then, specifically.

framework dollars to thinking millions for on of side? you're that Kind of company? Is any of how millions Is be other that or going or the would meaningful thoughts it about around, your helpful. maybe tens be

Jay Snowden

that you to Dave, tackle Sure. want one?

Dave Williams

facts little Hi, John, bounced this. the around and Sure. a have the on guidance

deferral number. hard But of that it's backs based on we'll to preliminary and certain carry So exact an qualify payroll credits expensing give refundable NOL for taxes we believe eligible evaluation currently our certain and qualified payroll immediate improvements.

with tax months. estimated all NOLs. we're that's refund within $XX the and next anticipating receiving of between $XX And the primarily XX So an that to million due million

John DeCree

That's helpful, some forward looking at point team, the to meeting you it. And Dave. appreciate I welcome to soon.

Jay Snowden

and right Kamika you. out here. of Thank All time we're

on in have soon terms sports stay more across with our ready making be well. wanted our And lot to everybody as the a talk to thank And morning our having safe. we're this betting of live with which and everything are us you, hopefully will the forward how So, that time going joining we development go for We sports app to really to portfolio, progress businesses well at especially launch. the as reopened. as next share of to look

So to soon. thanks talk safe. everybody. you And Stay all

Operator

you. all that today. thank call great we And conference We your Thank the conclude you day. participation. a disconnect you ask for does have lines. And That for your

PENN Entertainment (PENN) 7 May 202020 Q1 Earnings call transcript