Greektown Superholdings, Inc. Reports Third Quarter Results

Nov 14, 2011, 17:17 ET from Greektown Superholdings, Inc.

DETROIT, Nov. 14, 2011 /PRNewswire/ -- Greektown Superholdings, Inc. ("Greektown" or the "company") today reported financial results for its third quarter ended September 30, 2011.

Net revenues for the quarter ended September 30, 2011 were $80.0 million, compared to $84.6 million for the same quarter of 2010, a decrease of 5.5%.

Net loss for the third quarter was $7.2 million compared to $5.0 million a year ago, and EBITDA(1) decreased to $17.8 million for the third quarter of 2011 from $20.4 million in the same quarter of 2010.

"Although we are pleased with the progress of our casino renovation, the resulting disruption negatively impacted third quarter revenues," said Michael Puggi, President & CEO of Greektown. "We have made substantial improvements to our facility, affecting over 20,000 square feet of our total 100,000 square feet of gaming space – including the reconfiguration of our table game area, the remodeling of The Fringe bar and the refurbishment of the first floor promotions area. These improvements, despite their short-term impact, are critical to the successful implementation of our long-term strategic plan."

The company's cash position improved during the nine months ended September 30, 2011, with cash and cash equivalents increasing to $45.9 million at quarter end, compared to $30.2 million at December 31, 2010. The increase was primarily due to proceeds received from the previously announced sale of land to Wayne County, Michigan, during the third quarter of 2011, as well as operating results for the first nine months of 2011. The company did not borrow against its $30.0 million revolving loan agreement during the third quarter.

Greektown expects capital expenditures for the year ending December 31, 2011 to be approximately $18.0 million, including spending related to the new Asteria casino bar and lounge, scheduled for completion in December 2011. For the year ending December 31, 2012, capital expenditures are projected to be approximately $18.0 million, excluding spending on our new valet parking facility.

"We are focusing our 2012 investment on projects designed to expand the appeal of Greektown," said Puggi. "We will continue to renovate the casino environment by adding features that not only engage our existing customers, but attract new guests as well."

"Furthermore, we plan on improving the accessibility of our property. The most significant element of this plan is the construction of our new valet parking facility, scheduled to break ground in 2012. This facility will make it more convenient than ever to visit Greektown."

"These changes, in addition to the previously announced four year labor agreement reached with the Detroit Casino Council, are designed to improve Greektown's competitiveness and create long-term value for our customers, team members, and shareholders."

(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, 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. 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. Factors that might affect such forward-looking statements include, among other things, general economic and business conditions, competitive conditions (including the opening of new casinos and the potential legalization of Internet gambling in the United States), and ability to service indebtedness as well as those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Greektown. 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 Condensed Statements of Operations (unaudited)

(In Thousands, except share and per share data)






Successor (1)

Predecessor (1)


Three Months
Ended
September 30,

Three Months
Ended
September 30,

Nine Months
Ended
September 30,

Six Months Ended
June 30,


2011

2010

2011

2010

Revenues





Casino

$            82,184

$            87,094

$                   260,103

$                177,429

Food and beverage

5,320

5,900

17,236

11,924

Hotel

2,848

2,569

8,240

4,628

Other

1,060

1,291

3,554

2,482

Gross revenues

91,412

96,854

289,133

196,463

Less promotional allowances

11,422

12,235

39,699

23,591

Net revenues

79,990

84,619

249,434

172,872






Operating expenses





Casino

19,791

22,362

59,884

44,291

Gaming taxes

17,719

18,832

56,058

38,469

Food and beverage

4,070

3,916

14,320

7,817

Hotel

2,288

2,188

6,918

4,397

Marketing, advertising, and entertainment  

1,732

1,496

5,429

4,146

Facilities

4,997

4,736

15,245

9,689

Depreciation and amortization

8,301

10,031

28,888

10,488

General and administrative expenses

11,610

11,076

34,965

21,542

Operating expenses

70,508

74,637

221,707

140,839

Income from operations

9,482

9,982

27,727

32,033






Other expenses





Interest expense

(14,411)

(14,733)

(43,032)

(39,866)

Net gain (loss) on Chapter 11 related reorganization items from fresh start adjustments

-

378

(1,149)

301,352

Total other (expense) income, net

(14,411)

(14,355)

(44,181)

261,486






(Loss) income before income taxes

(4,929)

(4,373)

(16,454)

293,519






Income tax expense

(2,236)

(632)

(2,549)

(2,598)

Net (loss) income

$            (7,165)

$            (5,005)

$                   (19,003)

$                290,921






Loss per share:





Basic

$            (79.43)

$            (66.41)

$                   (224.42)

N/A

Diluted

$            (79.43)

$            (66.41)

$                   (224.42)

N/A






Weighted average common shares outstanding

144,231

140,000

142,048

N/A

Weighted average common and common equivalent shares outstanding

144,231

140,000

142,048

N/A







(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.



Greektown Superholdings, Inc.

Consolidated Condensed Balance Sheets

(In Thousands, except share and per share data)








September 30,

December 31,


2011

2010


(unaudited)


Assets



Current assets:



Cash and cash equivalents

$            45,932

$          30,195

Restricted cash

5,000

Certificate of deposit

534

Accounts receivable, net and notes receivable

3,799

7,987

Other current assets

9,001

18,470

Total current assets

58,732

62,186




Property, building, and equipment, net

316,325

335,608




Other assets:



Financing fees - net of accumulated amortization

12,451

14,884

Casino development rights and other intangible assets

195,850

206,200

Goodwill

110,252

110,252




Total assets

$          693,610

$        729,130



Greektown Superholdings, Inc.

Consolidated Condensed Balance Sheets

(In Thousands, except share and per share data)








September 30,

December 31,


2011

2010


(unaudited)


Liabilities and shareholders' equity



Current liabilities:



Accounts payable

12,337

12,068

Taxes payable

1,250

295

Accrued interest

12,551

25,164

Unsecured distribution liability

10,000

Accrued expenses and other liabilities

10,465

9,626

Total current liabilities

36,603

57,153




Long-term liabilities:



Other accrued income taxes

8,797

8,887

Senior secured notes - net

366,829

364,218

Obligation under capital lease

2,492

2,510

Deferred income taxes

8,412

7,282

Total long-term liabilities

386,530

382,897




Total liabilities

423,133

440,050




Total shareholders' equity

270,477

289,080

Total liabilities and shareholders' equity

$          693,610

$        729,130



Greektown Superholdings, Inc.

Consolidated Statements of Cash Flows

(In Thousands)


Successor (1)

Predecessor (1)


Nine months Ended
September 30,

Three Months Ended
September 30,

Six months Ended June 30,


2011

2010

2010

Operating activities




Net (loss) income

$                    (19,003)

$            (5,005)

$                 290,921

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:




Depreciation and amortization

28,888

10,031

10,488

Amortization of finance fees and accretion of discount on senior notes

5,168

1,633

2,079

Chapter 11 related reorganization items

1,149

(378)

(301,354)

Deferred income taxes

1,130

(18)

1,350

Stock compensation

400

79

Changes in current assets and liabilities:




Accounts receivable - gaming

208

312

1,684

Accounts receivable - other

529

(93)

Property tax refund receivable

3,451

State of Michigan gaming tax refundable


5,743

6,585

Inventories

(12)

74

20

Prepaid expenses

9,481

2,180

4,748

Notes receivables

-

460

Accounts payable

1,519

7,355

(6,315)

Accrued PIK interest

-

(27,783)

City of Detroit settlement agreement accrual

-

(13,547)

Unsecured distribution liability

(10,000)

Accrued expenses and other liabilities

(13,356)

9,419

14,031

Net cash provided by (used in) operating activities before reorganization costs

9,552

31,332

(16,633)

Operating cash flows for reorganization costs

-

(4,216)

(14,557)

Net cash provided by (used in) operating activities

9,552

27,116

(31,190)





Investing activities




Decrease in restricted cash

5,000

Capital expenditures

(9,946)

(4,450)

(5,566)

Disposition of real estate

10,681

Redemption of (investment in) certificate of deposit

534

(1)

(2)

Net cash provided by (used in) investing activities

6,269

(4,451)

(5,568)





Financing activities




Proceeds from borrowings on long-term notes payable

-

362,605

Payments on long-term debt  

-

(516,328)

Payments on notes payable

-

(476)

(913)

Financing fees paid

(84)

(185)

(16,702)

Proceeds from issuance of stockholders' equity

-

196,000

Net cash (used in) provided by financing activities

(84)

(661)

24,662





Net increase (decrease) in cash and cash equivalents

15,737

22,004

(12,096)

Cash and cash equivalents at beginning of year  

30,195

13,596

25,692

Cash and cash equivalents at end of period

$                     45,932

$            35,600

$                   13,596





Supplemental disclosure of cash flow information




Cash paid during the period for interest

$                     50,648

$                 103

$                   13,689

Cash paid during the period for income taxes

$                          556

$                 760

$                        475





(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.



Greektown Superholdings, Inc.

Reconciliation of Net (loss) Income to EBITDA

(In Thousands, except share and per share data)







Successor (1)

Predecessor (1)


Three Months Ended
September 30,

Three Months Ended
September 30,

Nine Months Ended
September 30,

Six Months Ended
June 30,


2011

2010

2011

2010






Net (loss) income (2)

$                        (7,165)

$                        (5,005)

$                   (19,003)

$                290,921

   Interest expense

14,411

14,733

43,032

39,866

   Income tax expense

2,236

632

2,549

2,598

   Depreciation and amortization

8,301

10,031

28,888

10,488

EBITDA (3)

$                        17,783

$                        20,391

$                     55,466

$                343,873


(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.


(2) Net (loss) income successor three ended September 30, 2010, nine months ended September 30, 2011, and predecessor six months ended June 30, 2011 are inclusive of Net gain (loss) on Chapter 11 related reorganization items from fresh- start accounting adjustments.


(3) 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 bases for valuation of gaming companies. 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.



SOURCE Greektown Superholdings, Inc.



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