Press Releases

RENO, Nev.--(BUSINESS WIRE)-- Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado,” “ERI,” or “the Company”) today reported operating results for the second quarter ended June 30, 2017.

“Eldorado’s operating momentum and financial growth continued in the second quarter as, on a combined basis after giving effect to the acquisition of Isle of Capri, Adjusted EBITDA rose 7.8% year over year,” said Gary Carano, Chairman and Chief Executive Officer of Eldorado. “Our second quarter growth was broad-based as Adjusted EBITDA improved at 13 of our 19 properties and we delivered year over year property margin increases at our West, Midwest and East regions and flat margin results for our South region. As a result, Eldorado’s combined consolidated Adjusted EBITDA margin improved 230 basis points in the quarter to 23.4%.

“Our expanded scale following the May 1 completion of the Isle of Capri transaction significantly diversified our Adjusted EBITDA composition, as no single market accounted for more than approximately 15% of total property Adjusted EBITDA in the second quarter. Overall, our second quarter results continue to highlight the efficacy of our strategy to build shareholder value by leveraging our proven operating model into a more diversified regional gaming entity.

“Our integration of the Isle of Capri properties is off to a very strong start. We have already achieved nearly $30 million of the anticipated $35 million in annual synergies and with the implementation of a four region reporting structure we are bringing best-practice operating strategies from across the organization down to the property-level quickly and efficiently. We have started to implement such best practices from our legacy and newly acquired operations as we target further margin enhancement and elevated guest service and satisfaction across the entire property portfolio. Looking ahead, we believe that there are significant opportunities for continued margin enhancement as we extract a range of efficiencies from our marketing, advertising, player promotion, and food and beverage operations.

“We are also evaluating opportunities across our portfolio for return-focused investments that are intended to unlock underlying value in properties and drive future profitable growth. Eldorado has a solid record of success in undertaking property-specific enhancements that elevate the guest experience and its market competitiveness while also generating a return on our investment. Thus far in 2017, we have completed the renovation of 153 rooms and the Showroom at Eldorado Reno, the new Canter’s Delicatessen and poker room opening at Silver Legacy, and upgrades at Circus Circus which include the renovation of 648 rooms, a redesigned 6,700 square foot video arcade, and new food and beverage operations including Madame Butterworks Curious Café, Kanpai Sushi, El Jefe’s Cantina and the new food court featuring three distinct culinary options, with Habit Burger, Piezzetta Pizza Kitchen and Panda Express. This comprehensive facility enhancement program is helping Eldorado deliver a more integrated experience across the Reno Tri-Properties’ operations for our guests while also providing a variety of amenities that makes each property feel distinctive and unique.

“We are very optimistic as we look forward to the second half of the year, and believe our successful integration of the Isle of Capri properties to date, the benefit of our expanded scale, and the ongoing implementation of operating strategies have positioned the Company to deliver additional value for our shareholders.”

Balance Sheet and Liquidity

At June 30, 2017, Eldorado had $103.6 million in cash and cash equivalents and $22.6 million in restricted cash. Outstanding indebtedness at June 30, 2017 totaled $2.3 billion, including $90 million outstanding on the Company’s revolving credit facility. Our purchase price accounting is preliminary as of June 30, 2017. Capital expenditures in the second quarter and first six months of 2017 totaled $23.6 million and $29.8 million, respectively. The Company expects 2017 full-year capital expenditures of $80.0 million, with approximately $26.8 million allocated to project cap-ex and the remaining $53.2 million for maintenance cap-ex.

“Our expanded scale is delivering the expected benefit in free cash flow as we paid down $39.5 million of debt in the second quarter,” said Tom Reeg, President and Chief Financial Officer. “Our priority continues to be to deploy free cash flow to reduce leverage which should position us to pursue future growth opportunities.”

Eldorado expects the $134.5 million sale of Isle of Capri Hotel Lake Charles to close later in 2017, subject to regulatory approval, and the Company intends to allocate all of the net proceeds from the sale to debt reduction. The operations of Lake Charles has been classified as discontinued operations and as assets held for sale for all periods presented.

Summary of 2017 Second Quarter Region Results

Reflecting the completion on May 1 of the Company’s acquisition of Isle of Capri, Eldorado has changed its quarterly property results reporting to report results in four regions. The new reporting format is also consistent with changes the Company has made in its management reporting structure.

West Region(Reno Tri-Properties, Isle Casino Hotel Black Hawk and Lady Luck Casino Black Hawk)

Net revenue for the West Region properties for the quarter ended June 30, 2017 declined approximately 5.6% to $109.4 million compared to $115.9 million in the prior-year period, with operating income of $19.2 million compared to $19.8 million in the year-ago quarter. Adjusted EBITDA was $26.7 million reflecting an Adjusted EBITDA margin of 24.5% compared to Adjusted EBITDA of $27.2 million on an Adjusted EBITDA margin of 23.5% in the prior-year period. Net revenue, operating income and Adjusted EBITDA for the West region in the second quarter of 2017 were impacted by a challenging comparison to the prior year period which included the benefit to the Reno Tri-Properties’ operations from the men’s bowling tournament.

Midwest Region(Isle Casino Waterloo, Isle Casino Bettendorf, Isle of Capri Casino Boonville, Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville and Isle of Capri Casino Kansas City)

Net revenue for the Midwest Region properties for the quarter ended June 30, 2017 increased approximately 1.5% to $103.8 million compared to $102.2 million in the prior-year period, with operating income of $26.0 million compared to $20.4 million in the year-ago quarter. Adjusted EBITDA rose approximately 9.7% to $33.2 million as the Adjusted EBITDA margin for the segment rose 230 basis points to 31.9%. Adjusted EBITDA increased year over year at five of the six Midwest Region properties. Adjusted EBITDA for the Midwest Region in the prior-year period was $30.2 million reflecting an Adjusted EBITDA margin of 29.6%.

South Region(Isle Casino Racing Pompano Park, Eldorado Shreveport, Isle of Capri Casino Lula and Lady Luck Casino Vicksburg)

Net revenue for the South Region properties for the quarter ended June 30, 2017 declined approximately 4.7% to $90.9 million compared to $95.3 million in the prior-year period, with operating income of $15.0 million compared to $15.7 million in the year-ago quarter. Adjusted EBITDA was $21.2 million compared to Adjusted EBITDA of $21.8 million in the prior-year period with Adjusted EBITDA margin for the region increasing 40 basis points to 23.3%. The South Region results were impacted by severe flooding in 2017 over the course of approximately seven days at Lady Luck Casino in Vicksburg, MS, which remained opened but experienced a significant decline in visitation throughout the seven-day period.

East Region(Presque Isle Downs and Casino, Lady Luck Casino Nemacolin, Eldorado Scioto Downs Racino and Mountaineer Casino, Racetrack and Resort)

Net revenue for the East Region properties for the quarter ended June 30, 2017 declined approximately 1.5% to $122.6 million compared to $124.4 million in the prior-year period, with operating income of $18.0 million compared to $13.7 million in the year-ago quarter. Despite the modest revenue decline, Adjusted EBITDA for the East Region rose 11.2% to $26.6 million compared to Adjusted EBITDA of $23.9 million in the prior-year period as the East region’s Adjusted EBITDA margin improved 240 basis points to 21.7%. The East region’s three largest properties delivered year-over-year Adjusted EBITDA growth, including the tenth consecutive quarter of Adjusted EBITDA growth for Eldorado Scioto Downs and the second consecutive quarter of double digit growth at Mountaineer Casino, Racetrack & Resort which continues to benefit from the Company’s initiatives to improve amenities and right-size operating expenses to match current visitation and revenue volumes.

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. Adjusted EBITDA represents operating income (loss) before depreciation and amortization, stock based compensation, transaction expenses, S-1 expenses, severance expenses and other, which includes equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property, and other regulatory gaming assessments, including the impact of the change in regulatory reporting requirements, to the extent that such items existed in the periods presented. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with U.S. 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 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.

Second Quarter Conference Call

Eldorado will host a conference call at 4:30 p.m. ET 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 719/457-2701, conference ID 9062486 (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 nineteen properties in ten states, including Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s properties feature approximately 20,000 slot machines and VLTs, more than 550 table games and over 6,500 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 statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, 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 are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release.Such risks, uncertainties and other important factors include, but are not limited to:Eldorado’s ability to promptly and effectively integrate the business of Eldorado and Isle and realize synergies resulting from the combined operations; our substantial indebtedness and the impact of such obligations on our operations and liquidity; competition; sensitivity of our operations to reductions in discretionary consumer spending and changes in general economic and market conditions; governmental regulations and increases in gaming taxes and fees in jurisdictions in which we operate; and 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.

The accompanying condensed notes are an integral part of these consolidated financial statements.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170808006431/en/

Eldorado Resorts, Inc.
Thomas Reeg, 775-328-0112
President and Chief Financial Officer
investorrelations@eldoradoresorts.com
or
JCIR
Joseph N. Jaffoni, Richard Land, 212-835-8500
eri@jcir.com

Source: Eldorado Resorts, Inc.