Greektown Superholdings, Inc. Reports First Quarter 2012 Financial Results
DETROIT, May 15, 2012 /PRNewswire/ -- Greektown Superholdings, Inc. ("Greektown" or the "company") today reported financial results for its first quarter ended March 31, 2012.
Net revenues for the quarter ended March 31, 2012 were $91.8 million, compared to $85.5 million for the same quarter of 2011, an increase of 7.4%. Income from operations for the first quarter increased to $14.9 million compared to $9.0 million a year ago, and net loss improved to $1.3 million compared to $8.5 million a year ago. EBITDA(1) increased by approximately 29.6%, to $23.6 million in the first quarter of 2012 from $18.2 million in the same quarter of 2011. Net loss and EBITDA for the first quarter of 2011 included $1.1 million of expense related to Chapter 11 reorganization items.
"We're pleased that the quarter's net revenues exceeded those of the prior year for the second consecutive quarter," said Michael Puggi, Greektown's president and chief executive officer. "We are also encouraged by the improvement in EBITDA. By increasing net revenues while controlling operating expenses, EBITDA as a percentage of net revenues increased to 25.7% in the first quarter of 2012, compared to 21.3% in the first quarter of 2011. In addition, we believe that the measured investments we have made in enhancing the property, including the Asteria bar/lounge and the Super Pit table game area, have increased our appeal and competitiveness."
Cash and cash equivalents were $46.1 million at March 31, 2012, compared to $26.1 million at March 31, 2011, and the company did not borrow against its revolving loan agreement during the first quarter of 2012. The company paid semiannual interest of approximately $25.0 million on its senior secured notes in each of the quarters ended March 31, 2012 and March 31, 2011.
Amendment to Revolving Loan Agreement
In May 2012, the Michigan Gaming Control Board approved a proposed amendment to the company's revolving loan agreement with Comerica Bank which, among other modifications, increases the aggregate principal amount available under the facility by $15.0 million to $45.0 million. Any borrowings under the additional $15.0 million commitment are required to fund expenditures relating to the new valet parking facility, and are to be repaid in quarterly installments equal to 1/20th of the amount advanced, commencing on the earlier of July 1, 2013 and the first month after the parking facility's completion date. The interest rate applicable to borrowings under the $45.0 million commitment is equal to LIBOR plus 2.25% (under the LIBOR option set forth in the amendment), provided that the company's leverage ratio remains in excess of 4.0:1.0. The amendment does not modify the term of the revolving loan agreement, which expires on December 30, 2013, unless renewed or extended. The company intends to execute the proposed amendment with Comerica Bank as soon as practicable.
(1) EBITDA (earnings before interest, taxes, depreciation and amortization) is a measurement not in accordance with Generally Accepted Accounting Principles (GAAP) but is commonly used in the gaming industry as a measure of performance and as a basis for valuation of gaming companies. Reconciliation of net (loss) income to EBITDA is attached to this release. EBITDA is a supplemental financial measure used by management, as well as industry analysts, to evaluate our operations. However, EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with GAAP. All companies do not calculate EBITDA in the same manner. As a result, the Company's EBITDA may not be comparable to similarly titled measures presented by other companies.
About Greektown Superholdings, Inc.
Greektown Superholdings, Inc. operates, through its subsidiaries, the Greektown Casino-Hotel. Located in the heart of Detroit's Greektown Dining and Entertainment District, Greektown Casino-Hotel opened on November 10, 2000. Greektown Casino-Hotel offers such amenities as the International Buffet, Eclipz Lounge, Asteria, The Fringe, Shotz Sports Bar & Grill, Bistro 555 and a VIP lounge for players. Greektown Casino-Hotel opened its 400-room hotel tower in February 2009 and recently became the first Michigan casino to debut a smartphone application. For more information, visit greektowncasinohotel.com.
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about capitalization and performance of Greektown. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and words such as "anticipate," "expect," "will," "continue," or other similar words or phrases are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in other press releases, written statements or documents filed with the Securities and Exchange Commission are subject to known and unknown risks, uncertainties and contingencies, including competitive factors (such as the opening of new casinos in Ohio) and the successful execution of potential financing transactions, and there can be no assurance that our results for the first quarter are indicative of our future results. Many of these risks, uncertainties and contingencies are beyond Greektown's control, and may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Any forward-looking statements in this release speak only as of the date of this release, and Greektown undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
| Greektown Superholdings, Inc. |
||
| Consolidated Statements of Operations (unaudited) |
||
| (In thousands, except share and per share data) |
||
| Three Months Ended March 31, |
Three Months Ended March 31, |
|
| 2012 |
2011 |
|
| Revenues |
||
| Casino |
$ 95,368 |
$ 88,303 |
| Food and beverage |
6,420 |
6,133 |
| Hotel |
2,950 |
2,653 |
| Other |
1,337 |
1,300 |
| Gross revenues |
106,075 |
98,389 |
| Less promotional allowances |
14,237 |
12,912 |
| Net revenues |
91,838 |
85,477 |
| Operating expenses |
||
| Casino |
21,241 |
20,270 |
| Gaming taxes |
20,564 |
19,076 |
| Food and beverage |
4,759 |
5,615 |
| Hotel |
2,617 |
2,439 |
| Marketing, advertising, and entertainment |
1,334 |
1,721 |
| Facilities |
5,269 |
5,358 |
| Depreciation and amortization |
8,632 |
10,269 |
| General and administrative expenses |
12,340 |
11,674 |
| Other |
143 |
80 |
| Operating expenses |
76,899 |
76,502 |
| Income from operations |
14,939 |
8,975 |
| Other expenses |
||
| Interest expense |
(12,653) |
(12,590) |
| Amortization of finance fees |
(1,838) |
(1,687) |
| Other income (expense), net |
56 |
(10) |
| Chapter 11 related reorganization items |
- |
(1,054) |
| Total other expense, net |
(14,435) |
(15,341) |
| Income (loss) before provisions for state income taxes |
504 |
(6,366) |
| Income tax expense – current |
(74) |
(555) |
| Income tax expense – deferred |
(1,682) |
(1,600) |
| Net loss |
$ (1,252) |
$ (8,521) |
| Loss per share: |
||
| Basic |
$ (38.09) |
$ (91.04) |
| Diluted |
$ (38.09) |
$ (91.04) |
| Weighted average common shares outstanding |
145,544 |
140,735 |
| Weighted average common and common equivalent shares outstanding |
145,544 |
140,735 |
| Greektown Superholdings, Inc. |
||
| Consolidated Balance Sheets |
||
| (In thousands, except share and per share data) |
||
| March 31, |
December 31, |
|
| 2012 |
2011 |
|
| (unaudited) |
||
| Assets |
||
| Current assets: |
||
| Cash and cash equivalents |
$ 46,061 |
$ 50,754 |
| Accounts receivable – gaming, net |
703 |
734 |
| Accounts receivable – other, net |
1,560 |
1,216 |
| Inventories |
423 |
398 |
| Prepaid expenses |
7,429 |
5,605 |
| Prepaid Michigan Gaming Control Board annual fee |
6,258 |
8,823 |
| Prepaid municipal service fees |
2,137 |
3,346 |
| Deposits |
1,632 |
1,631 |
| Total current assets |
66,203 |
72,507 |
| Property, building, and equipment, net |
319,145 |
317,085 |
| Other assets: |
||
| Financing fees - net of accumulated amortization |
10,720 |
11,571 |
| Deposits and other assets |
30 |
30 |
| Casino development rights |
117,800 |
117,800 |
| Trade names |
26,300 |
26,300 |
| Rated player relationships - net of accumulated amortization |
44,850 |
48,300 |
| Goodwill |
110,252 |
110,252 |
| Total assets |
$ 695,300 |
$ 703,845 |
| Greektown Superholdings, Inc. |
||
| Consolidated Balance Sheets |
||
| (In thousands, except share and per share data) |
||
| March 31, |
December 31, |
|
| 2012 |
2011 |
|
| Liabilities and shareholders' equity |
||
| Current liabilities: |
||
| Accounts payable |
13,843 |
15,128 |
| Accrued interest |
12,550 |
25,063 |
| Accrued expenses and other liabilities |
13,241 |
9,631 |
| Total current liabilities |
39,634 |
49,822 |
| Long-term liabilities: |
||
| Other accrued income taxes |
8,944 |
8,871 |
| Senior secured notes - net |
368,735 |
367,748 |
| Obligation under capital lease |
2,485 |
2,489 |
| Deferred income taxes |
11,776 |
10,094 |
| Total long-term liabilities |
391,940 |
389,202 |
| Total liabilities |
431,574 |
439,024 |
| Shareholders' equity (members' deficit): |
||
| Series A-1 preferred stock at $0.01 par value; |
||
| 1,688,268 shares authorized, 1,463,535 shares issued and outstanding at March 31, 2012 and December 31, 2011 |
185,396 |
185,396 |
| Series A-2 preferred stock at $0.01 par value; |
||
| 645,065 shares authorized, 162,255 shares issued and outstanding at March 31, 2012 and December 31, 2011 |
20,551 |
20,551 |
| Series A-1 preferred warrants at $0.01 par value; |
||
| 202,511 shares issued and outstanding at March 31, 2012 and December 31, 2011 |
25,651 |
25,651 |
| Series A-2 preferred warrants at $0.01 par value; |
||
| 460,587 shares issued and outstanding at March 31, 2012 and December 31, 2011 |
58,342 |
58,342 |
| Series A-1 common stock at $0.01 par value; |
||
| 4,354,935 shares authorized,145,544 and 142,423 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively |
1 |
1 |
| Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued |
– |
– |
| Additional paid-in capital |
13,809 |
13,652 |
| Accumulated deficit |
(40,024) |
(38,772) |
| Total shareholders' equity |
263,726 |
264,821 |
| Total liabilities and shareholders' equity |
$ 695,300 |
$ 703,845 |
| Greektown Superholdings, Inc. |
||
| Consolidated Statements of Cash Flows |
||
| (In thousands) |
||
| Three Months Ended March 31, |
Three Months Ended March 31, |
|
| 2012 |
2011 |
|
| Operating activities |
||
| Net (loss) income |
$ (1,252) |
$ (8,521) |
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
||
| Depreciation and amortization |
8,632 |
10,269 |
| Amortization of finance fees and accretion of discount on senior notes |
1,838 |
1,687 |
| Chapter 11 related reorganization items |
- |
1,054 |
| Deferred income taxes |
1,682 |
1,600 |
| Stock compensation |
157 |
96 |
| Changes in current assets and liabilities: |
- |
|
| Accounts receivable - gaming |
31 |
(304) |
| Accounts receivable - other |
(344) |
468 |
| Inventories |
(25) |
23 |
| Prepaid expenses |
1,949 |
2,301 |
| Accounts payable |
(1,285) |
1,632 |
| Accrued interest |
(12,513) |
(12,539) |
| Accrued expenses and other liabilities |
(269) |
2,100 |
| Net cash provided by (used in) operating activities before reorganization costs |
(1,399) |
(134) |
| Operating cash flows for reorganization costs |
- |
(271) |
| Net cash provided by (used in) operating activities |
(1,399) |
(405) |
| Investing activities |
||
| Decrease (increase) in restricted cash |
- |
(2,500) |
| Capital expenditures |
(3,294) |
(1,603) |
| Redemption of (investment in) certificate of deposit |
- |
534 |
| Net cash provided by (used in) investing activities |
(3,294) |
(3,569) |
| Financing activities |
||
| Financing fees paid |
– |
(72) |
| Net cash (used in) provided by financing activities |
- |
(72) |
| Net increase (decrease) in cash and cash equivalents |
(4,693) |
(4,046) |
| Cash and cash equivalents at beginning of year |
50,754 |
30,195 |
| Cash and cash equivalents at end of period |
$ 46,061 |
$ 26,149 |
| Supplemental disclosure of cash flow information |
||
| Cash paid during the period for interest |
$ 25,101 |
$ 25,245 |
| Cash paid during the period for income taxes |
$ - |
$ 400 |
| Greektown Superholdings, Inc. |
||
| Reconciliation of Net Loss to EBITDA (1) |
||
| (In thousands) |
||
| Three Months Ended March 31, |
Three Months Ended March 31, |
|
| 2012 |
2011 |
|
| Net loss |
$ (1,252) |
$ (8,521) |
| Interest expense |
14,435 |
14,287 |
| Income tax expense |
1,756 |
2,155 |
| Depreciation and amortization |
8,632 |
10,269 |
| EBITDA (1) |
$ 23,571 |
$ 18,190 |
| (1) EBITDA (earnings before interest, taxes, depreciation and amortization) is a measurement not in accordance |
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SOURCE Greektown Superholdings, Inc.
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