Horseshoe Gaming Holding Corp. Reports First Quarter 2001 Earnings

Apr 25, 2001, 01:00 ET from Horseshoe Gaming Holding Corp.

    JOLIET, Ill., April 25 /PRNewswire/ -- Horseshoe Gaming Holding Corp. (the
 "Company") today reported a 24 percent increase in first quarter net income to
 $25.3 million as compared to $20.5 million for the first quarter of 2000.
 First quarter net revenues increased 5 percent to $263.5 million, from
 $249.9 million in 2000.
     Consolidated earnings before interest, taxes, depreciation, amortization
 and certain other items ("EBITDA") decreased 7 percent to $68.3 million for
 the quarter ended March 31, 2001 as compared to $73.2 million for the
 comparable period in 2000.  EBITDA is calculated by adding depreciation and
 amortization, deferred compensation and other non-recurring items to income
 from operations.  The Company considers EBITDA to be a widely accepted
 financial indicator of a company's ability to service debt, fund capital
 expenditures and expand its business.  EBITDA, however, is not calculated in
 the same way by all companies and is neither a measure required, nor
 represents cash flow from operations as defined by generally accepted
 accounting principles.  EBITDA should not be considered by an investor as an
 alternative to net income, as an indicator of operating performance or as an
 alternative to cash flow as a measure of liquidity.
 
 
                            INDIVIDUAL PROPERTY RESULTS
                                   (in millions)
 
                                                    Quarter ended March 31,
                                                         2001         2000
     BOSSIER CITY
     Net revenues                                       $63.0        $63.7
     EBITDA before corporate expenses and
      non-recurring charges                             $14.0        $18.5
 
     TUNICA
     Net revenues                                       $65.4        $61.2
     EBITDA before corporate expenses and
      non-recurring charges                             $25.1        $24.2
 
     HAMMOND
     Net revenues                                       $67.5        $63.9
     EBITDA before corporate expenses and
      non-recurring charges                             $14.8        $18.9
 
     JOLIET
     Net revenues                                       $67.6        $61.1
     EBITDA before corporate expenses and
      non-recurring charges                             $21.0        $18.7
 
     Net revenues in Bossier City decreased 1 percent in the first quarter of
 2001 as compared to the prior year, primarily due to increased competition in
 the Bossier City/Shreveport market.  Increases in both slot volume and hold
 percentages were partially offset by decreases in the table games hold
 percentage in the first quarter of 2001.
     EBITDA before corporate expenses and non-recurring charges in Bossier City
 decreased 24 percent in the first quarter of 2001 as compared to the first
 quarter of 2000.  Bossier City's EBITDA margin before corporate expenses and
 non-recurring charges was 22 percent, compared to 29 percent in the
 year-earlier period.  The decreased margins in 2001 are primarily due to
 increased marketing expenses related to additional competition in the market.
     Tunica reported an increase in net revenues of 7 percent in the quarter
 ended March 31, 2001 as compared to the comparable period in the prior year.
 The increase was primarily the result of volume increases in both slot and
 table games which can be attributed to the expanded facility which opened in
 the fourth quarter of 2000.  The volume increase in slots was partially offset
 by a decrease in hold percentages as compared to the prior year quarter.
 First quarter 2001 revenue also reflects an increase in the table game hold
 percentage over the same period in 2000.
     EBITDA before corporate expenses and non-recurring charges in Tunica
 increased 3 percent for the quarter ended March 31, 2001 as compared to the
 prior year period.  Tunica's EBITDA margin before corporate expenses and
 non-recurring charges was 38 percent for the quarter ended March 31, 2001, as
 compared to 40 percent in the comparable year-earlier period.  The Tunica
 facility experienced increased costs in the 2001 period related to the
 recently opened expansion, including staffing, utilities and higher cost of
 sales for food and beverage items related to the enlarged buffet and the new
 gourmet restaurant.
     Net revenues in Hammond increased 6 percent in the first quarter of 2001
 as compared to the prior year.  This increase is attributable to higher
 volumes in both slots and table games, partially offset by lower hold
 percentages in both of these areas.
     EBITDA before corporate expenses and non-recurring charges in Hammond
 decreased 22 percent in the first quarter of 2001 as compared to the prior
 year.  Hammond's EBITDA margin before corporate expenses and non-recurring
 charges was 22 percent in the first quarter of 2001 as compared to 30 percent
 in the prior year.  During the first quarter of 2001, the Company continued to
 invest significant resources in the Hammond facility in order to increase the
 service standard at that property as it gears up to convert to the Horseshoe
 brand in the second quarter of 2001.  Hammond has also been affected by
 continued construction disruption in the pavilion area necessary for the
 conversion of the Empress brand to the Horseshoe brand.
     Joliet reported that net revenues increased 11 percent in the first
 quarter of 2001 as compared to the first quarter of 2000.  This increase is
 largely attributable to increases in both slot volume and hold.
     EBITDA before corporate expenses and non-recurring charges in Joliet
 increased 12 percent in the first quarter of 2001 as compared to the prior
 year.  EBITDA margin before corporate expenses and non-recurring charges was
 unchanged at 31 percent for both the first quarter of 2001 and the first
 quarter of 2000.  During the quarter, Joliet incurred significant direct mail
 expense related to the cash offers included in several of their promotions.
 
     OTHER ITEMS
     On April 12, 2001, the Company entered into an Agreement and Plan of
 Merger (the "Merger Agreement") with Argosy Gaming Company ("Argosy").  Under
 the terms of the Merger Agreement, the Company has agreed to sell the stock of
 Joliet to Argosy for cash consideration of $465.0 million.  The transaction is
 subject to the satisfaction of certain conditions, including the receipt of
 necessary approvals of the Illinois Gaming Board and the expiration or
 termination of the waiting period under the Hart-Scott-Rodino Antitrust
 Improvements Act of 1976.  The Company anticipates closing the transaction,
 subject to the receipt of all required approvals, in the third quarter of
 2001.
     In March 2001, the Louisiana legislature passed a bill that will increase
 the gaming taxes paid by riverboats in the state of Louisiana by 3 percent.
 The tax increase for riverboats located in the Shreveport/Bossier City market
 will be phased in over two years, with the first 1 percent increase effective
 April 1, 2001.  Taxes will be increased an additional 1 percent on April 1,
 2002 and the final increase will occur on April 1, 2003.
     This press release may be deemed to contain forward-looking statements,
 express or implied, which are made pursuant to the safe harbor provisions of
 the Private Securities Litigation Reform Act of 1995.  These forward-looking
 statements are based on the beliefs of management, as well as assumptions made
 based on information currently available to management.  Forward-looking
 statements involve risks and uncertainties, which could cause actual results
 or events to differ materially from those expressed or implied therein,
 including, but not limited to, competition from other gaming operations and
 licensing and other regulatory risks.  Further information on these and other
 applicable risks are included in the company's filings with the Securities and
 Exchange Commission.
     The Company will be conducting a conference call on Wednesday, April 25,
 2001 at 2:00 p.m. Central Daylight Time.  Interested parties can dial
 1-888-790-3053 to participate.  The passcode is "Horseshoe" and the leader
 will be Kirk Saylor.  A tape replay of the conference call can be accessed at
 1-800-678-0756 beginning one hour after the call and continuing until
 12:01 a.m. CDT on May 1, 2001.
 
 
                  HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                                   (in thousands)
 
                                                    Quarter ended March 31,
                                                       2001          2000
 
     Revenues
       Casino                                        $259,143      $244,189
       Food and beverage                               24,126        21,130
       Hotel                                            7,512         8,106
       Retail and other                                 5,374         4,912
                                                      296,155       278,337
 
     Promotional allowances                           (32,677)      (28,451)
       Net revenues                                   263,478       249,886
 
     Expenses
       Casino                                         144,905       127,003
       Food and beverage                                7,725         8,782
       Hotel                                              796         1,147
       Retail and other                                 1,616         1,622
       General and administrative                      33,576        30,662
       Corporate expenses                               6,534         7,484
       Deferred compensation expense                      418         8,449
       Preopening expense                                 891            --
       (Gain) loss on disposal of assets                  (59)           18
       Depreciation and amortization                   18,517        20,012
         Total expenses                               214,919       205,179
 
     Operating income                                  48,559        44,707
 
     Other income (expense)
       Interest expense                               (24,155)      (24,779)
       Interest income                                    483           701
       Other, net                                         450          (146)
         Total other income (expense)                 (23,222)      (24,224)
 
     Net income                                       $25,337       $20,483
 
     EBITDA                                           $68,326       $73,186
 
 
                                                    As of            As of
                                                March 31, 2001   Dec. 31, 2000
     Summary Balance Sheet Data:
       Cash and cash equivalents                    $81,543          $78,133
       Total assets                              $1,203,335       $1,204,538
       Long-term debt, including current
        maturities                                 $991,778       $1,028,221
       Stockholders' equity                         $62,794          $52,608
 
 
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SOURCE Horseshoe Gaming Holding Corp.
    JOLIET, Ill., April 25 /PRNewswire/ -- Horseshoe Gaming Holding Corp. (the
 "Company") today reported a 24 percent increase in first quarter net income to
 $25.3 million as compared to $20.5 million for the first quarter of 2000.
 First quarter net revenues increased 5 percent to $263.5 million, from
 $249.9 million in 2000.
     Consolidated earnings before interest, taxes, depreciation, amortization
 and certain other items ("EBITDA") decreased 7 percent to $68.3 million for
 the quarter ended March 31, 2001 as compared to $73.2 million for the
 comparable period in 2000.  EBITDA is calculated by adding depreciation and
 amortization, deferred compensation and other non-recurring items to income
 from operations.  The Company considers EBITDA to be a widely accepted
 financial indicator of a company's ability to service debt, fund capital
 expenditures and expand its business.  EBITDA, however, is not calculated in
 the same way by all companies and is neither a measure required, nor
 represents cash flow from operations as defined by generally accepted
 accounting principles.  EBITDA should not be considered by an investor as an
 alternative to net income, as an indicator of operating performance or as an
 alternative to cash flow as a measure of liquidity.
 
 
                            INDIVIDUAL PROPERTY RESULTS
                                   (in millions)
 
                                                    Quarter ended March 31,
                                                         2001         2000
     BOSSIER CITY
     Net revenues                                       $63.0        $63.7
     EBITDA before corporate expenses and
      non-recurring charges                             $14.0        $18.5
 
     TUNICA
     Net revenues                                       $65.4        $61.2
     EBITDA before corporate expenses and
      non-recurring charges                             $25.1        $24.2
 
     HAMMOND
     Net revenues                                       $67.5        $63.9
     EBITDA before corporate expenses and
      non-recurring charges                             $14.8        $18.9
 
     JOLIET
     Net revenues                                       $67.6        $61.1
     EBITDA before corporate expenses and
      non-recurring charges                             $21.0        $18.7
 
     Net revenues in Bossier City decreased 1 percent in the first quarter of
 2001 as compared to the prior year, primarily due to increased competition in
 the Bossier City/Shreveport market.  Increases in both slot volume and hold
 percentages were partially offset by decreases in the table games hold
 percentage in the first quarter of 2001.
     EBITDA before corporate expenses and non-recurring charges in Bossier City
 decreased 24 percent in the first quarter of 2001 as compared to the first
 quarter of 2000.  Bossier City's EBITDA margin before corporate expenses and
 non-recurring charges was 22 percent, compared to 29 percent in the
 year-earlier period.  The decreased margins in 2001 are primarily due to
 increased marketing expenses related to additional competition in the market.
     Tunica reported an increase in net revenues of 7 percent in the quarter
 ended March 31, 2001 as compared to the comparable period in the prior year.
 The increase was primarily the result of volume increases in both slot and
 table games which can be attributed to the expanded facility which opened in
 the fourth quarter of 2000.  The volume increase in slots was partially offset
 by a decrease in hold percentages as compared to the prior year quarter.
 First quarter 2001 revenue also reflects an increase in the table game hold
 percentage over the same period in 2000.
     EBITDA before corporate expenses and non-recurring charges in Tunica
 increased 3 percent for the quarter ended March 31, 2001 as compared to the
 prior year period.  Tunica's EBITDA margin before corporate expenses and
 non-recurring charges was 38 percent for the quarter ended March 31, 2001, as
 compared to 40 percent in the comparable year-earlier period.  The Tunica
 facility experienced increased costs in the 2001 period related to the
 recently opened expansion, including staffing, utilities and higher cost of
 sales for food and beverage items related to the enlarged buffet and the new
 gourmet restaurant.
     Net revenues in Hammond increased 6 percent in the first quarter of 2001
 as compared to the prior year.  This increase is attributable to higher
 volumes in both slots and table games, partially offset by lower hold
 percentages in both of these areas.
     EBITDA before corporate expenses and non-recurring charges in Hammond
 decreased 22 percent in the first quarter of 2001 as compared to the prior
 year.  Hammond's EBITDA margin before corporate expenses and non-recurring
 charges was 22 percent in the first quarter of 2001 as compared to 30 percent
 in the prior year.  During the first quarter of 2001, the Company continued to
 invest significant resources in the Hammond facility in order to increase the
 service standard at that property as it gears up to convert to the Horseshoe
 brand in the second quarter of 2001.  Hammond has also been affected by
 continued construction disruption in the pavilion area necessary for the
 conversion of the Empress brand to the Horseshoe brand.
     Joliet reported that net revenues increased 11 percent in the first
 quarter of 2001 as compared to the first quarter of 2000.  This increase is
 largely attributable to increases in both slot volume and hold.
     EBITDA before corporate expenses and non-recurring charges in Joliet
 increased 12 percent in the first quarter of 2001 as compared to the prior
 year.  EBITDA margin before corporate expenses and non-recurring charges was
 unchanged at 31 percent for both the first quarter of 2001 and the first
 quarter of 2000.  During the quarter, Joliet incurred significant direct mail
 expense related to the cash offers included in several of their promotions.
 
     OTHER ITEMS
     On April 12, 2001, the Company entered into an Agreement and Plan of
 Merger (the "Merger Agreement") with Argosy Gaming Company ("Argosy").  Under
 the terms of the Merger Agreement, the Company has agreed to sell the stock of
 Joliet to Argosy for cash consideration of $465.0 million.  The transaction is
 subject to the satisfaction of certain conditions, including the receipt of
 necessary approvals of the Illinois Gaming Board and the expiration or
 termination of the waiting period under the Hart-Scott-Rodino Antitrust
 Improvements Act of 1976.  The Company anticipates closing the transaction,
 subject to the receipt of all required approvals, in the third quarter of
 2001.
     In March 2001, the Louisiana legislature passed a bill that will increase
 the gaming taxes paid by riverboats in the state of Louisiana by 3 percent.
 The tax increase for riverboats located in the Shreveport/Bossier City market
 will be phased in over two years, with the first 1 percent increase effective
 April 1, 2001.  Taxes will be increased an additional 1 percent on April 1,
 2002 and the final increase will occur on April 1, 2003.
     This press release may be deemed to contain forward-looking statements,
 express or implied, which are made pursuant to the safe harbor provisions of
 the Private Securities Litigation Reform Act of 1995.  These forward-looking
 statements are based on the beliefs of management, as well as assumptions made
 based on information currently available to management.  Forward-looking
 statements involve risks and uncertainties, which could cause actual results
 or events to differ materially from those expressed or implied therein,
 including, but not limited to, competition from other gaming operations and
 licensing and other regulatory risks.  Further information on these and other
 applicable risks are included in the company's filings with the Securities and
 Exchange Commission.
     The Company will be conducting a conference call on Wednesday, April 25,
 2001 at 2:00 p.m. Central Daylight Time.  Interested parties can dial
 1-888-790-3053 to participate.  The passcode is "Horseshoe" and the leader
 will be Kirk Saylor.  A tape replay of the conference call can be accessed at
 1-800-678-0756 beginning one hour after the call and continuing until
 12:01 a.m. CDT on May 1, 2001.
 
 
                  HORSESHOE GAMING HOLDING CORP. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                                   (in thousands)
 
                                                    Quarter ended March 31,
                                                       2001          2000
 
     Revenues
       Casino                                        $259,143      $244,189
       Food and beverage                               24,126        21,130
       Hotel                                            7,512         8,106
       Retail and other                                 5,374         4,912
                                                      296,155       278,337
 
     Promotional allowances                           (32,677)      (28,451)
       Net revenues                                   263,478       249,886
 
     Expenses
       Casino                                         144,905       127,003
       Food and beverage                                7,725         8,782
       Hotel                                              796         1,147
       Retail and other                                 1,616         1,622
       General and administrative                      33,576        30,662
       Corporate expenses                               6,534         7,484
       Deferred compensation expense                      418         8,449
       Preopening expense                                 891            --
       (Gain) loss on disposal of assets                  (59)           18
       Depreciation and amortization                   18,517        20,012
         Total expenses                               214,919       205,179
 
     Operating income                                  48,559        44,707
 
     Other income (expense)
       Interest expense                               (24,155)      (24,779)
       Interest income                                    483           701
       Other, net                                         450          (146)
         Total other income (expense)                 (23,222)      (24,224)
 
     Net income                                       $25,337       $20,483
 
     EBITDA                                           $68,326       $73,186
 
 
                                                    As of            As of
                                                March 31, 2001   Dec. 31, 2000
     Summary Balance Sheet Data:
       Cash and cash equivalents                    $81,543          $78,133
       Total assets                              $1,203,335       $1,204,538
       Long-term debt, including current
        maturities                                 $991,778       $1,028,221
       Stockholders' equity                         $62,794          $52,608
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X22169231
 
 SOURCE  Horseshoe Gaming Holding Corp.