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Section 1: 8-K (8-K)

8-K
false 0001590895 0001590895 2020-02-26 2020-02-26

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2020

 

Eldorado Resorts, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

 

001-36629

 

46-3657681

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

100 West Liberty Street, Suite 1150

Reno, NV

 

89501

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code (775) 328-0100 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.00001, par value

 

ERI

 

NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02 Results of Operations and Financial Condition.

On February 26, 2020 Eldorado Resorts, Inc. issued a press release announcing its unaudited financial results for the three and twelve months ended December 31, 2019 and other information. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit

    No.    

   

Description

         
 

99.1

   

Earnings Press Release dated February 26, 2020

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ELDORADO RESORTS, INC.,

 

 

 

a Nevada corporation

             

Date: February 26, 2020

 

 

By:

 

/s/ Thomas R. Reeg

 

 

Name:

 

Thomas R. Reeg

 

 

Title:

 

Chief Executive Officer

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

ELDORADO RESORTS REPORTS FOURTH QUARTER NET REVENUE OF $592.1 MILLION,

OPERATING INCOME OF $58.9 MILLION, AND ADJUSTED EBITDA OF $154.4 MILLION

Reno, Nevada (February 26, 2020) – Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported operating results for the fourth quarter ended December 31, 2019.

Fourth Quarter 2019 and Recent Highlights:

 

   

Net revenue of $592.1 million, a decrease of 11.9% on a GAAP basis and a decrease of 4.4% on a same-store basis versus the comparable prior-year period

 

   

Operating income of $58.9 million, a decrease of 32.1% on a GAAP basis and 32.2% on a same-store basis versus the comparable prior-year period, with a GAAP net loss of $13.2 million

 

   

Adjusted EBITDA on a same-store basis was $146.2 million up 0.4% versus the comparable prior-year period

 

   

Adjusted EBITDA margin rose 130 basis points on a same-store basis versus the comparable prior-year period

 

   

Full year 2019 Adjusted EBITDA margin rose 240 basis point to 28.0% on a same-store basis versus the comparable prior-year period

 

   

Closed on the divestiture of three assets during the quarter for gross proceeds of $385 million

 

   

Subsequent to quarter end, Eldorado entered into a definitive agreement to sell the Eldorado Shreveport Resort and Casino for $230 million in cash

 

   

Repaid $388 million of debt in fourth quarter and reduced debt in 2019 by more than $700 million

“Eldorado generated fourth quarter Adjusted EBITDA of $146.2 million on a same-store basis, up 0.4% year over year against a 22.0% comparable year-over-year Adjusted EBITDA growth rate in the fourth quarter of 2018. We achieved a 130 basis point year-over-year increase in our consolidated Adjusted EBITDA margin to 26.4% driven by our Central Region, which grew Adjusted EBITDA 11.5% and expanded Adjusted EBITDA margins by 370 basis points during the quarter,” said Tom Reeg, Chief Executive Officer of Eldorado Resorts.

“2019 was an extremely active and productive year for Eldorado. In June we entered into a transformative deal to acquire Caesars Entertainment. Additionally, we completed the sale of five assets during the year for total gross proceeds of $564 million. We also entered into agreements to sell two additional assets to Twin River for $230 million and the Eldorado Shreveport to Maverick Gaming for $230 million. On the sports wagering front, we opened operations in Iowa and Indiana in 2019 and we are excited about the long-term opportunity created by this new revenue stream. As we continue to move through the regulatory review process in advance of the expected closing in the first half of 2020 for the Caesars Entertainment acquisition, we remain extremely excited about the opportunity to create value for shareholders and stakeholders of both companies. Leaders from both companies have been identified to lead integration planning efforts, which are well underway in a number of critical areas. The execution teams are focused on integrating the two companies post-closing with a plan to drive both top line and bottom line performance.”


($ in thousands,

except per share data)

  Total Net Revenue  
    Three Months Ended  
    December 31,  
    2019     2019
Divestitures(1)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition
    2018
Total(4)
    Change  

West

  $ 127,481     $ —       $ —       $ 127,481     $ 136,981     $ —       $ —       $ 136,981       -6.9

Midwest

    88,685       16,610       —         72,075       95,774       23,341       —         72,433       -0.5

South

    105,465       —         —         105,465       119,570       —         —         119,570       -11.8

East

    151,509       22,102       —         129,407       200,697       69,381       —         131,316       -1.5

Central

    117,087       —         —         117,087       118,586       —         —         118,586       -1.3

Corporate and Other

    1,897       —         —         1,897       152       —         —         152       1148.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

  $ 592,124     $ 38,712     $ —       $ 553,412     $ 671,760     $ 92,722     $ —       $ 579,038       -4.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

($ in thousands,

except per share data)

  Operating Income  
    Three Months Ended  
    December 31,  
    2019     2019
Divestitures(1)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition
    2018
Total(4)
    Change  

West

  $ 18,220     $ —       $ —       $ 18,220     $ 20,650     $ —       $ —       $ 20,650       -11.8

Midwest

    27,114       4,557       —         22,557       25,084       5,319       —         19,765       14.1

South

    12,899       —         —         12,899       14,752       —         —         14,752       -12.6

East

    25,602       3,214       —         22,388       30,799       6,024       —         24,775       -9.6

Central

    24,876       —         —         24,876       21,372       —         —         21,372       16.4

Corporate and Other

    (49,799     —         —         (49,799     (25,931     —         —         (25,931     92.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

  $ 58,912     $ 7,771     $ —       $ 51,141     $ 86,726     $ 11,343     $ —       $ 75,383       -32.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

($ in thousands,

except per share data)

  Adjusted EBITDA  
    Three Months Ended  
    December 31,  
    2019     2019
Divestitures(1)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition
    2018
Total(4)
    Change  

West

  $ 33,126     $ —       $ —       $ 33,126     $ 34,572     $ —       $ —       $ 34,572       -4.2

Midwest

    31,781       4,728       —         27,053       33,525       7,462       —         26,063       3.8

South

    22,392       —         —         22,392       25,898       —         —         25,898       -13.5

East

    37,753       3,469       —         34,284       43,678       8,232       —         35,446       -3.3

Central

    37,527       —         —         37,527       33,649       —         —         33,649       11.5

Corporate and Other

    (8,201     —         —         (8,201     (10,043     —         —         (10,043     -18.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA(7)

  $ 154,378     $ 8,197     $ —       $ 146,181     $ 161,279     $ 15,694     $ —       $ 145,585       0.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

  $ (13,219         $ (120        
 

 

 

         

 

 

         

Basic EPS

  $ (0.17         $ 0.00          
 

 

 

         

 

 

         

Diluted EPS

  $ (0.17         $ 0.00          
 

 

 

         

 

 

         


($ in thousands, except
per share data)
  Total Net Revenue  
    Twelve Months Ended  
    December 31,  
    2019     2019
Divestitures(5)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition(6)
    2018
Total(4)
    Change  

West

  $ 524,721     $ —       $ —       $ 524,721     $ 483,532     $ —       $ 87,316     $ 570,848       -8.1

Midwest

    378,577       86,847       —         291,730       397,008       95,912       —         301,096       -3.1

South

    463,133       —         —         463,133       461,181       —         51,711       512,892       -9.7

East

    674,758       125,703       —         549,055       571,272       296,707       287,936       562,501       -2.4

Central

    479,761       —         —         479,761       142,485       —         349,241       491,726       -2.4

Corporate and Other

    7,299       —         —         7,299       529       —         94       623       1071.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Revenue

  $ 2,528,249     $ 212,550     $ —       $ 2,315,699     $ 2,056,007     $ 392,619     $ 776,298     $ 2,439,686       -5.1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except
per share data)
  Operating Income  
    Twelve Months Ended  
    December 31,  
    2019     2019
Divestitures(5)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition(6)
    2018
Total(4)
    Change  

West

  $ 84,992     $ —       $ —       $ 84,992     $ 84,548     $ —       $ 13,635     $ 98,183       -13.4

Midwest

    114,180       24,069       —         90,111       105,809       22,049       —         83,760       7.6

South

    74,622       —         —         74,622       64,851       —         355       65,206       14.4

East

    133,317       15,574       —         117,743       97,963       24,238       46,261       119,986       -1.9

Central

    105,772       —         —         105,772       24,240       —         70,105       94,345       12.1

Corporate and Other

    (102,910     —         —         (102,910     (67,308     —         (52,127     (119,435     -13.8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Income

  $ 409,973     $ 39,643     $ —       $ 370,330     $ 310,103     $ 46,287     $ 78,229     $ 342,045       8.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
($ in thousands, except
per share data)
  Adjusted EBITDA  
    Twelve Months Ended  
    December 31,  
    2019     2019
Divestitures(5)
    2019
Pre-Acquisition
    2019
Total(2)
    2018     2018
Divestitures(3)
    2018
Pre-Acquisition(6)
    2018
Total(4)
    Change  

West

  $ 140,957     $ —       $ —       $ 140,957     $ 126,189     $ —       $ 22,914     $ 149,103       -5.5

Midwest

    140,551       28,899       —         111,652       139,242       30,555       —         108,687       2.7

South

    114,871       —         —         114,871       112,532       —         6,451       118,983       -3.5

East

    181,866       19,841       —         162,025       131,337       40,635       70,864       161,566       0.3

Central

    152,893       —         —         152,893       39,499       —         93,691       133,190       14.8

Corporate and Other

    (33,659     —         —         (33,659     (31,869     —         (15,230     (47,099     -28.5
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA(7)

  $ 697,479     $ 48,740     $ —       $ 648,739     $ 516,930     $ 71,190     $ 178,690     $ 624,430       3.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

  $ 81,001           $ 95,235          
 

 

 

         

 

 

         

Basic EPS

  $ 1.04           $ 1.23          
 

 

 

         

 

 

         

Diluted EPS

  $ 1.03           $ 1.22          
 

 

 

         

 

 

         

 

(1)

Figures are for Mountaineer, Cape Girardeau and Caruthersville for the period beginning October 1, 2019 and ending December 5, 2019.

(2)

Total figures for 2019 exclude results of operations for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of the operations reported by the Company.

(3)

Figures are for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville for the three and twelve months ended December 31, 2018.

(4)

Total figures for 2018 include combined results of operations for ERI, Tropicana Entertainment, Inc. (“TEI”) and Grand Victoria Casino (“GV”) and exclude results of operations for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of the operations reported by the Company.

(5)

Figures are for Presque Isle Downs for the period beginning January 1, 2019 and ending January 11, 2019, Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019, and Mountaineer, Cape Girardeau and Caruthersville for the period January 1, 2019 and ending December 5, 2019.

(6)

Figures are for TEI for the nine months ended September 30, 2018 and for GV for the period beginning January 1, 2018 and ending August 6, 2018. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.

(7)

Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See “Reconciliation of GAAP Measures to Non-GAAP Measures” below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to operating income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP.


Balance Sheet and Liquidity

As of December 31, 2019, Eldorado had $2.6 billion of debt outstanding. Total cash and cash equivalents were $206.3 million, excluding restricted cash. No amounts were outstanding under the Company’s $500 million revolving credit facility.

“During the fourth quarter of 2019, we continued to utilize our free cash flow from operations and asset sale proceeds to reduce debt. During the quarter we paid down $388 million on our term loan bringing year-to-date total debt reduction to over $700 million,” said Bret Yunker, Chief Financial Officer.

Summary of 2019 Fourth Quarter Region Results

The property results for properties owned by Tropicana Entertainment have been included in results of operations for the fourth quarter of 2018, which preceded the date of acquisition of such properties. The full quarter property results for Grand Victoria Casino are included in the results of operations for the fourth quarter of 2018 following the completion of the acquisition of the property by Eldorado on August 7, 2018. Results for Presque Isle Downs and Lady Luck Nemacolin have been excluded as both assets were divested. Results for Mountaineer, Cape Girardeau and Caruthersville have also been excluded as they were divested to Century Casinos in December 2019. As such this presentation is intended to provide insights on same-store results and does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods.

West Region (THE ROW, Isle Casino Hotel Black Hawk, Lady Luck Casino Black Hawk, Tropicana Laughlin Hotel and Casino and MontBleu Casino Resort & Spa)

Net revenue for the West Region properties for the quarter ended December 31, 2019 declined 6.9% to $127.5 million compared to $137.0 million in the prior-year period and operating income decreased to $18.2 million from $20.7 million in the prior-year quarter. West Region fourth quarter Adjusted EBITDA declined 4.2% to $33.1 million. The West region’s 2019 fourth quarter Adjusted EBITDA margin improved by 70 basis points to 26.0%.

Midwest Region (Isle Casino Waterloo, Isle Casino Bettendorf, Isle of Capri Casino Boonville, and Isle of Capri Casino Kansas City)

Net revenue for the Midwest Region properties for the quarter ended December 31, 2019 decreased approximately 0.5% to $72.1 million compared to $72.4 million in the prior-year period while operating income increased to $22.6 million from $19.8 million in the prior-year quarter. Adjusted EBITDA rose approximately 3.8% to $27.1 million compared to the prior year as the Adjusted EBITDA margin for the segment rose 155 basis points to 37.5%. Adjusted EBITDA for the Midwest Region in the prior-year period was $26.1 million reflecting an Adjusted EBITDA margin of 36.0%.

South Region (Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula, Lady Luck Casino Vicksburg, Isle of Capri Lake Charles, Trop Casino Greenville and Belle of Baton Rouge Casino & Hotel)

Net revenue for the South Region properties for the quarter ended December 31, 2019 declined approximately 11.8% to $105.5 million compared to $119.6 million in the prior-year period while operating income declined to $12.9 million from $14.8 million in the prior-year period. South Region 2019 fourth quarter Adjusted EBITDA declined to $22.4 million versus $25.9 million in the year ago period. The region’s Adjusted EBITDA margin declined 40 basis points to 21.2%.


East Region (Eldorado Scioto Downs Racino and Tropicana Casino and Resort, Atlantic City)

Net revenue for the East Region properties for the quarter ended December 31, 2019 declined approximately 1.5% to $129.4 million compared to $131.3 million in the prior-year period and operating income decreased to $22.4 million from $24.8 million in the prior-year period. East Region 2019 fourth quarter Adjusted EBITDA declined 3.3% to $34.3 million compared to Adjusted EBITDA of $35.4 million in the prior-year period as the Adjusted EBITDA margin declined 50 basis points to 26.5%.

Central Region (Grand Victoria Casino, Tropicana Evansville and Lumière Place)

Net revenue for the Central Region for the quarter ended December 31, 2019 decreased approximately 1.3% to $117.1 million compared to $118.6 million in the prior-year period while operating income increased to $24.9 million from $21.4 million in the prior-year period. Central Region Adjusted EBITDA for the fourth quarter rose 11.5% to $37.5 million compared to Adjusted EBITDA of $33.6 million in the prior-year period as the Central Region’s Adjusted EBITDA margin improved 370 basis points to 32.1%. All three Central Region properties generated year over year Adjusted EBITDA growth.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding the Company’s ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock-based compensation, transaction expenses, severance expense, selling costs associated with the disposition of properties, proceeds from the terminated sale of Vicksburg, preopening expenses, costs associated with resolving the historical Tropicana bankruptcy, business interruption insurance proceeds, real estate tax settlements, other than temporary impairments on investments, impairment charges, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and equipment, (gain) loss on property divestitures, and other non-cash regulatory gaming assessments. Adjusted EBITDA also excludes expense associated with our Master Lease with GLPI as the transaction was accounted for as a financing obligation. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our Master Lease, and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

Fourth Quarter Conference Call

Eldorado will host a conference call at 4:30PM EST today. Senior management will discuss the financial results and host a question and answer session. The dial-in number for the audio conference call is (334) 777-6978, conference ID 5471424 (domestic and international callers). Participants can also access a live webcast of the call through the “Events & Presentations” section of Eldorado’s website at http://www.eldoradoresorts.com/ and a replay of the webcast will be archived on the site for 90 days following the live event.


About Eldorado Resorts, Inc.

Eldorado Resorts is a leading casino entertainment company that owns and operates twenty-three properties in eleven states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, and Ohio. In aggregate, Eldorado’s properties feature approximately 23,900 slot machines, VLTs and e-tables and approximately 660 table games, and over 11,300 hotel rooms. For more information, please visit www.eldoradoresorts.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements regarding the expected synergies and benefits of a potential combination of Eldorado and Caesars, including the expected accretive effect of the proposed transaction on Eldorado’s results of operations; the anticipated benefits of geographic diversity that would result from the proposed transaction and the expected results of Caesars’ gaming properties; expectations about future business plans, prospective performance and opportunities; required regulatory approvals; the expected timing of the completion of the proposed transaction; and the anticipated financing of the proposed transaction , as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There is no assurance that the proposed transaction will be consummated and there are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements made herein. Such risks, uncertainties and other important factors include, but are not limited to: (a) risks related to the combination of Caesars and Eldorado and the integration of their respective businesses and assets; (b) the possibility that the proposed transaction with Caesars and related transactions do not close when expected or at all because required regulatory or other approvals are not received or other conditions to the consumption thereof are not satisfied on a timely basis or at all; (c) the risk that the financing required to fund the proposed transaction with Caesars and related transactions is not obtained on the terms anticipated or at all; (d) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; (e) potential litigation challenging the proposed transaction; (f) the possibility that the anticipated benefits of the proposed transaction, including cost savings and expected synergies, are not realized when expected or at all, including as a result of the impact of, or issues arising from, the implementation of our operating strategies and integration of our business and Caesars’ business; (g) conditions imposed on the companies in order to obtain required regulatory approvals; (h) uncertainties in the global economy and credit markets and its potential impact on our ability to finance the proposed transaction; (i) the possibility that the proposed transaction may be more expensive to complete than expected, including as a result of unexpected factors or events; (j) diversion of management’s attention from ongoing business operations and opportunities; (k) the ability to retain certain of our key employees and Caesars’ key employees; (l) risks associated with increased leverage from the proposed transaction; (m) changes in the value of Eldorado’s common stock between the date of the merger agreement and the closing of the proposed transaction; (n) competitive responses to the proposed transaction; (o) legislative, regulatory and economic developments; (p) uncertainties as to the timing of the consummation of the proposed transaction and the ability of each party to consummate the proposed transaction; (q) the impact of provisions of the Merger Agreement limiting the operation of our business prior to the closing of proposed transaction with Caesars and (r) other risks and uncertainties described in our reports on Form 10-K, Form 10-Q and Form 8-K.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

Contact:

 

Brian Agnew    Joseph N. Jaffoni, Richard Land
Eldorado Resorts    JCIR
775/328-0112    212/835-8500
[email protected]    [email protected]

- Tables follow -


ELDORADO RESORTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(Unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2019     2018     2019     2018  

REVENUES:

        

Casino and pari-mutuel commissions

   $ 422,338     $ 492,961     $ 1,808,186     $ 1,553,378  

Food and beverage

     72,345       82,695       301,417       247,339  

Hotel

     62,415       69,356       299,908       183,804  

Other

     35,026       26,748       118,738       71,486  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     592,124       671,760       2,528,249       2,056,007  
  

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES:

        

Casino and pari-mutuel commissions

     186,226       229,731       802,327       749,289  

Food and beverage

     58,373       67,691       238,661       202,618  

Hotel

     23,123       24,830       99,223       65,009  

Other

     11,874       13,646       45,938       38,676  

Marketing and promotions

     31,700       39,906       129,373       106,161  

General and administrative

     116,665       126,053       476,751       349,598  

Corporate

     15,176       13,615       65,996       46,632  

Impairment charges

     —         —         958       13,602  

Depreciation and amortization

     54,643       58,224       221,525       157,429  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     497,780       573,696       2,080,752       1,729,014  

Gain (Loss) on sale or disposal of property and equipment

     27,907       (441     49,575       (835

Proceeds from terminated sales

     —         —         —         5,000  

Transaction expenses

     (63,030     (10,800     (84,658     (20,842

Loss from unconsolidated affiliates

     (309     (97     (2,441     (213
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     58,912       86,726       409,973       310,103  
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER EXPENSE:

        

Interest expense, net

     (69,043     (75,154     (286,248     (171,732

Loss on early retirement of debt, net

     (6,308     —         (7,512     (162

Unrealized gain (loss) on restricted investments

     8,305       (2,587     8,765       (2,587
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense

     (67,046     (77,741     (284,995     (174,481
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income taxes

     (8,134     8,985       124,978       135,622  

Provision for income taxes

     (5,085     (9,105     (43,977     (40,387
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (13,219   $ (120   $ 81,001     $ 95,235  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share of common stock:

        

Basic

   $ (0.17   $ 0.00     $ 1.04     $ 1.23  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.17   $ 0.00     $ 1.03     $ 1.22  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average basic shares outstanding

     77,735,826       77,503,732       77,677,265       77,458,902  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average diluted shares outstanding

     77,735,826       77,503,732       78,593,819       78,282,101  
  

 

 

   

 

 

   

 

 

   

 

 

 


ELDORADO RESORTS, INC.

SUMMARY INFORMATION AND RECONCILIATION OF

OPERATING INCOME (LOSS) TO ADJUSTED EBITDA

($ in thousands)

 

     Three Months Ended December 31, 2019  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
     Transaction
Expenses (8)
     Other (9)     Adjusted
EBITDA
 

Including Divestitures:

               

West

   $ 18,220     $ 14,450      $ —        $ —        $ 456     $ 33,126  

Midwest

     27,114       4,495        7        —          165       31,781  

South

     12,899       9,300        2        —          191       22,392  

East

     25,602       12,045        —          —          106       37,753  

Central

     24,876       12,532        —          —          119       37,527  

Corporate

     (49,799     1,821        3,987        63,030        (27,240     (8,201
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 58,912     $ 54,643      $ 3,996      $ 63,030      $ (26,203   $ 154,378  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Divestitures:

               

West

   $ —       $ —        $ —        $ —        $ —       $ —    

Midwest

     4,557       —          5        —          166       4,728  

South

     —         —          —          —          —         —    

East

     3,214       172        —          —          83       3,469  

Central

     —         —          —          —          —         —    

Corporate

     —         —          —          —          —         —    
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Divestitures (1)

   $ 7,771     $ 172      $ 5      $ —        $ 249     $ 8,197  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Excluding Divestitures:

               

West

   $ 18,220     $ 14,450      $ —        $ —        $ 456     $ 33,126  

Midwest

     22,557       4,495        2        —          (1     27,053  

South

     12,899       9,300        2        —          191       22,392  

East

     22,388       11,873        —          —          23       34,284  

Central

     24,876       12,532        —          —          119       37,527  

Corporate

     (49,799     1,821        3,987        63,030        (27,240     (8,201
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding Divestitures (2)

   $ 51,141     $ 54,471      $ 3,991      $ 63,030      $ (26,452   $ 146,181  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


     Three Months Ended December 31, 2018  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
     Transaction
Expenses (8)
     Other (10)     Adjusted
EBITDA
 

Including Divestitures:

               

West

   $ 20,650     $ 13,084      $ —        $ —        $ 838     $ 34,572  

Midwest

     25,084       8,430        15        —          (4     33,525  

South

     14,752       11,014        9        —          123       25,898  

East

     30,799       12,660        2        —          217       43,678  

Central

     21,372       11,368        —          —          909       33,649  

Corporate

     (25,931     1,668        3,412        10,800        8       (10,043
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 86,726     $ 58,224      $ 3,438      $ 10,800      $ 2,091     $ 161,279  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Divestitures:

               

West

   $ —       $ —        $ —        $ —        $ —       $ —    

Midwest

     5,319       2,135        6        —          2       7,462  

South

     —         —          —          —          —         —    

East

     6,024       2,113        2        —          93       8,232  

Central

     —         —          —          —          —         —    

Corporate

     —         —          —          —          —         —    
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Divestitures (3)

   $ 11,343     $ 4,248      $ 8      $ —        $ 95     $ 15,694  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Excluding Divestitures:

               

West

   $ 20,650     $ 13,084      $ —        $ —        $ 838     $ 34,572  

Midwest

     19,765       6,295        9        —          (6     26,063  

South

     14,752       11,014        9        —          123       25,898  

East

     24,775       10,547        —          —          124       35,446  

Central

     21,372       11,368        —          —          909       33,649  

Corporate

     (25,931     1,668        3,412        10,800        8       (10,043
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Excluding Divestitures (4)

   $ 75,383     $ 53,976      $ 3,430      $ 10,800      $ 1,996     $ 145,585  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 


     Twelve Months Ended December 31, 2019  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (8)
     Other (9)     Adjusted
EBITDA
 

Including Divestitures:

              

West

   $ 84,992     $ 55,035      $ —       $ —        $ 930     $ 140,957  

Midwest

     114,180       25,145        36       —          1,190       140,551  

South

     74,622       39,165        13       —          1,071       114,871  

East

     133,317       48,064        7       —          478       181,866  

Central

     105,772       46,849        —         —          272       152,893  

Corporate

     (102,910     7,267        19,663       84,658        (42,337     (33,659
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Including Divestitures

   $ 409,973     $ 221,525      $ 19,719     $ 84,658      $ (38,396   $ 697,479  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Divestitures:

              

West

   $ —       $ —        $ —       $ —        $ —       $ —    

Midwest

     24,069       4,140        18       —          672       28,899  

South

     —         —          —         —          —         —    

East

     15,574       3,842        7       —          418       19,841  

Central

     —         —          —         —          —         —    

Corporate

     —         —          —         —          —         —    
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Divestitures (5)

   $ 39,643     $ 7,982      $ 25     $ —        $ 1,090     $ 48,740  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Excluding Divestitures:

              

West

   $ 84,992     $ 55,035      $ —       $ —        $ 930     $ 140,957  

Midwest

     90,111       21,005        18       —          518       111,652  

South

     74,622       39,165        13       —          1,071       114,871  

East

     117,743       44,222        —         —          60       162,025  

Central

     105,772       46,849        —         —          272       152,893  

Corporate

     (102,910     7,267        19,663       84,658        (42,337     (33,659
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Divestitures (6)

   $ 370,330     $ 213,543      $ 19,694     $ 84,658      $ (39,486   $ 648,739  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
     Twelve Months Ended December 31, 2018  
     Operating
Income
    Depreciation
and
Amortization
     Stock-based
Compensation
    Transaction
Expenses (8)
     Other (10)     Adjusted
EBITDA
 

Excluding Pre-Acquisition/Including Divestitures:

              

West

   $ 84,548     $ 40,131      $ (32   $ —        $ 1,542     $ 126,189  

Midwest

     105,809       33,083        106       —          244       139,242  

South

     64,851       37,357        59       —          10,265       112,532  

East

     97,963       27,913        14       —          5,447       131,337  

Central

     24,240       13,583        —         —          1,676       39,499  

Corporate

     (67,308     5,362        12,937       20,842        (3,702     (31,869
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Excluding Pre-Acquisition/Including Divestitures

   $ 310,103     $ 157,429      $ 13,084     $ 20,842      $ 15,472     $ 516,930  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Divestitures:

              

West

   $ —       $ —        $ —       $ —        $ —       $ —    

Midwest

     22,049       8,405        44       —          57       30,555  

South

     —         —          —         —          —         —    

East

     24,238       11,099        13       —          5,285       40,635  

Central

     —         —          —         —          —         —    

Corporate

     —         —          —         —          —         —    
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Divestitures (3)

   $ 46,287     $ 19,504      $ 57     $ —        $ 5,342     $ 71,190  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Pre-Acquisition:

              

West

   $ 13,635     $ 9,271      $ —       $ —        $ 8     $ 22,914  

Midwest

     —         —          —         —          —         —    

South

     355       6,076        —         —          20       6,451  

East

     46,261       24,444        —         —          159       70,864  

Central

     70,105       22,939        —         —          647       93,691  

Corporate

     (52,127     1,537        —         4,259        31,101       (15,230
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Pre-Acquisition (7)

   $ 78,229     $ 64,267      $ —       $ 4,259      $ 31,935     $ 178,690  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 


Including Pre-Acquisition/Excluding Divestitures:

               

West

   $ 98,183     $ 49,402      $ (32   $ —        $ 1,550      $ 149,103  

Midwest

     83,760       24,678        62       —          187        108,687  

South

     65,206       43,433        59       —          10,285        118,983  

East

     119,986       41,258        1       —          321        161,566  

Central

     94,345       36,522        —         —          2,323        133,190  

Corporate

     (119,435     6,899        12,937       25,101        27,399        (47,099
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total Including Pre-Acquisition/Excluding Divestitures (4)

   $ 342,045     $ 202,192      $ 13,027     $ 25,101      $ 42,065      $ 624,430  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(1)

Figures are for Mountaineer, Cape Girardeau and Caruthersville for the period beginning October 1, 2019 and ending December 5, 2019.

(2)

Total figures for the three months ended December 31, 2019 exclude the results of operations for Mountaineer, Cape Girardeau and Caruthersville. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

(3)

Figures are for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville for the three and twelve months ended December 31, 2018.

(4)

Total figures for the three and twelve months ended December 31, 2018 include the combined results of operations for GV, TEI and the Company and exclude results of operations for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

(5)

Figures are for Presque Isle Downs for the period beginning January 1, 2019 and ending January 11, 2019 and Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019 and Mountaineer, Cape Girardeau and Caruthersville for the period January 1, 2019 and ending December 5, 2019.

(6)

Total figures for 2019 exclude results of operations for Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to the results of operations reported by the Company.

(7)

Figures are for TEI for the nine months ended September 30, 2018 and for GV for the period beginning January 1, 2018 and ending August 6, 2018. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors and do not conform to GAAP.

(8)

Transaction expenses represent primarily costs related to the pending acquisition of Caesars for the three and twelve months ended December 31, 2019 and costs related to the acquisitions of GV, TEI and Isle for the three and twelve months ended December 31, 2018.

(9)

Other, for the three and twelve months ended December 31, 2019, is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in income (loss) of unconsolidated affiliate, impairment charges, costs associated with resolving the historical Tropicana bankruptcy, the (gain) loss associated with the sales of Presque Isle Downs, Nemacolin, Mountaineer, Cape Girardeau and Caruthersville and selling costs associated with the closed and pending divestitures of Mountaineer, Cape Girardeau, Caruthersville, Kansas City, Vicksburg and Shreveport.

(10)

Other, for the three and twelve months ended December 31, 2018 is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in income (loss) of an unconsolidated affiliate, preopening expenses, impairment charges at Vicksburg and Nemacolin, proceeds from the terminated sale of Vicksburg, other non-cash regulatory gaming assessments and selling costs associated with the divestitures of Presque Isle Downs and Nemacolin, the terminated sale of Vicksburg and the purchase of TEI and GV.

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