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Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2019 Operating Results

Published

7 years ago

May 9, 2019

Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2019 Operating Results Reading Time: 5 minutes

Mohegan Gaming & Entertainment , a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut and Inspire Korea in Incheon, South Korea, announced today operating results for its second fiscal quarter ended March 31, 2019.

“Volume trends across our portfolio remain inline to better than expected as overall gaming volumes at our flagship property, Mohegan Sun, remain robust despite completing our second full quarter of increased competitive pressure in the Northeast,” said Mario Kontomerkos, President & Chief Executive Officer. “Adjusting for unusually low table hold, overall MGE EBITDA would have been largely in line with our expectations, flat with last year’s comparable period, and well ahead of recent fiscal year 1Q19 performance. At the same time, non-gaming results continue to be healthy and remain a driving factor for our growth at Mohegan Sun. These revenue enhancements have been driven, in part, by the recent adoption of our $100 million revenue and cost improvement program – a plan we remain committed to delivering over the next several years. Outside of the Northeast, cash flows from our managed portfolio grew strongly, up 86% year over year. Looking ahead, in June we expect to assume operational control of two major Niagara Falls, Canada assets which will mark the first international operations for MGE and will provide increased earnings and cash flow diversity for our stakeholders. Similarly, we have begun to mobilize construction at our development site in Incheon, South Korea, having completed our negotiations with our general contractor and following the receipt of all necessary construction permits and approvals.”

Selected consolidated operating results for the second quarter ended March 31, 2019, and prior year period (unaudited):

Net revenues of $307.7 million vs. $332.0 million in the prior year period, a 7.3% decrease; and
Income from operations of $22.2 million vs. $56.1 million in the prior year period, a 60.4% decrease primary driven by one time accelerated depreciation due to the closure of Casino of Wind; and
Adjusted EBITDA of $67.2 million vs. $79.9 million in the prior year period, a 15.9% decrease.

Consolidated net revenues and Adjusted EBITDA declined during the quarter, driven by lower gaming revenues at Mohegan Sun and Mohegan Sun Pocono largely driven by unfavorable hold in the quarter at both properties. These declines were partially offset by improved non-gaming revenue growth, including entertainment and hotel revenues, at Mohegan Sun, as well as stronger Corporate Adjusted EBITDA, driven by tighter expense management and improved financial performance at ilani Casino Resort.

On October 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), on a modified retrospective basis. As such, results for the three months and six months ended March 31, 2019 in this release are presented under this new guidance, while results for the three months and six months ended March 31, 2018 remain presented under prior guidance. For comparative results for all periods as reported under the new guidance, please see our supplemental earnings deck, available on our website (https://mohegangaming.com/financial-information/).

Mohegan Sun
*Operating results (in thousands, unaudited):*

	For the Three Months Ended
	March 31,	March 31,		Percentage
	2019	2018	Variance	Variance
Net revenues	$ 238,391	$ 260,354	$ (21,963)	(8.4%)
Income from operations (1)	$ 19,913	$ 57,779	$ (37,866)	(65.5%)
Adjusted EBITDA	$ 59,341	$ 77,746	$ (18,405)	(23.7%)

(1) Includes $21.6 million in accelerated depreciation related to Casino of the Wind.

Net revenues and Adjusted EBITDA declined during the quarter, driven by lower overall gaming revenues and unfavorable table hold during the period, which was partially offset by stronger non-gaming results. Slot and table volumes declined 8.7% and 3.2%, respectively, in line with internal expectations. Had table hold percentage fallen into the historically normal range, net Revenues and Adjusted EBITDA would have declined less than 3.1% and 7.4%, respectively, on a 606 to 606 basis. Non-gaming revenues increased during the quarter, driven by improvement in nearly all segments of the business. The higher than normal decline in income from operations relates to the one-time accelerated depreciation expense of $21.6 million, caused by the closure of the Casino of the Wind in March, as that space will be designed and repurposed for higher and better use.

Mohegan Sun Pocono
*Operating results (in thousands, unaudited):*

	For the Three Months Ended
	March 31,	March 31,		Percentage
	2019	2018	Variance	Variance
Net revenues	$ 61,241	$ 67,130	$ (5,889)	(8.8%)
Income from operations	$ 8,214	$ 8,872	$ (658)	(7.4%)
Adjusted EBITDA	$ 11,592	$ 12,230	$ (638)	(5.2%)

Net revenues declined during the quarter driven by lower gaming revenues, largely reflecting the adverse impact from lower table hold. However, the year-over-year decline in Adjusted EBITDA was more muted due to a strong focus expense management, including lower payroll costs and certain casino marketing and promotional expenses. Notably, local marketing activity has started to return to more normalized levels following aggressive promotional activity from a regional competitor over the last several quarters.

Corporate
*Operating results (in thousands, unaudited):*

	For the Three Months Ended
	March 31,	March 31,		Percentage
	2019	2018	Variance	Variance
Net revenues	$ 8,125	$ 4,593	$ 3,532	76.9%
Loss from operations	$ (5,901)	$ (10,579)	$ 4,678	44.2%
Adjusted EBITDA	$ (3,716)	$ (10,122)	$ 6,406	63.3%

The increase in net revenues and Adjusted EBITDA was primarily due to higher management fees from ilani Casino Resort driven by continued improvement in performance at the property.

MGE Property Information

	Net Revenues		Income (Loss) from Operations		Adjusted EBITDA
(in thousands, unaudited)	For the Three Months Ended		For the Three Months Ended		For the Three Months Ended
	March 31,	March 31,	March 31,	March 31,	March 31,	March 31,
	2019	2018	2019	2018	2019	2018
Mohegan Sun	$ 238,391	$ 260,354	$ 19,913	$ 57,779	$ 59,341	$ 77,746
Mohegan Sun Pocono	61,241	67,130	8,214	8,872	11,592	12,230
Corporate	8,125	4,593	(5,901)	(10,579)	(3,716)	(10,122)
Inter-segment revenues	(60)	(60)	–	–	–	–
Total	$ 307,697	$ 332,017	$ 22,226	$ 56,072	$ 67,217	$ 79,854

Other Information

Liquidity

As of March 31, 2019, MGE held cash and cash equivalents of $91.4 million, compared to $103.9 million as of September 30, 2018. As of March 31, 2019, $55.0 million was drawn on MGE’s $250.0 million revolving credit facility, while no amounts were drawn on MGE’s $25.0 million line of credit. As of March 31, 2019, letters of credit issued under the revolving credit facility totaled $2.3 million, of which no amounts were drawn. Inclusive of letters of credit, which reduce borrowing availability under the revolving credit facility, MGE had approximately $192.7 million of borrowing capacity under its revolving credit facility and line of credit as of March 31, 2019.

About Mohegan Gaming & Entertainment:

Mohegan Gaming & Entertainment is a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut, and Inspire in Incheon, South Korea. The Company is owner, developer, and/or manager of integrated entertainment resorts throughout the United States, including Connecticut, New Jersey, Washington, Pennsylvania, Louisiana, Northern Asia, and, beginning in mid-2019, Niagara Falls, Canada. MGE owns and operates Connecticut Sun, a professional basketball team in the Women’s National Basketball Association, and the New England Black Wolves, a professional lacrosse team in the National Lacrosse League. For more information on MGE and our properties, visit www.mohegangaming.com.

SOURCE Mohegan Gaming & Entertainment

Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2019 Operating Results

Related Topics:gambling industry in Europe

George Miller

George Miller (Gyorgy Molnar) started his career in content marketing and has started working as an Editor/Content Manager for our company in 2016. George has acquired many experiences when it comes to interviews and newsworthy content becoming Head of Content in 2017. He is responsible for the news being shared on multiple websites that are part of the European Gaming Media Network.

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The post From ‘Mummyverse’ to Crash Games: Belatra Reviews a Landmark 2025 appeared first on Gaming and Gambling Industry Newsroom.

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The post ‘Chaos and Soul’: Ebaka Games Plots Global Expansion After Viral Launch appeared first on Gaming and Gambling Industry Newsroom.

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