Attached files
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| 8-K - CURRENT REPORT - Greektown Superholdings, Inc. | gtown-8k_033012.htm |
Exhibit 99.1
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FOR IMMEDIATE RELEASE
March 30, 2012
Greektown Superholdings, Inc. Reports Fourth Quarter and Full Year 2011 Financial Results
DETROIT, March 30, 2012 – Greektown Superholdings, Inc. (“Greektown” or the “company”) today reported financial results for its fourth quarter and full year ended December 31, 2011.
Net revenues for the quarter ended December 31, 2011 were $83.9 million, compared to $80.1 million for the same quarter of 2010, an increase of 4.7%. Net loss for the fourth quarter improved to $5.9 million compared to $9.6 million a year ago. EBITDA(1) decreased to $18.8 million for the fourth quarter of 2011 from $19.9 million in the same quarter of 2010. Fourth quarter 2010 EBITDA and net loss included $3.4 million of pre-tax income related to a property tax settlement agreement which retroactively reduced the company’s property tax basis.
Net revenues for the year ended December 31, 2011 were $333.4 million, and net loss was $24.9 million. EBITDA for the year ended December 31, 2011 was $74.2 million.
“We are encouraged that our renovation efforts, as well as other initiatives, are growing our business,” said Michael Puggi, president and chief executive officer of Greektown. “Despite a significant portion of the casino being affected by construction through the first half of December, we were able to increase fourth quarter revenues over the prior year and improve our operating performance. In addition, we are pleased with our guests’ enthusiastic response to the changes we’ve made. Of these changes, one of the most significant has been the opening of Asteria, a bar/lounge and entertainment facility that was completed on December 19th.”
“The projects completed in 2011 were important first steps in revitalizing Greektown, and provide our guests with an enhanced gaming experience,” said Puggi. “In 2012, we are focused on expanding our appeal through higher levels of service, a broader range of amenities, and improved access to our property.”
Cash and cash equivalents increased to $50.8 million at December 31, 2011, compared to $30.2 million a year ago. 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 year. The company did not borrow against its $30.0 million revolving loan agreement during the fourth quarter.
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The company’s capital expenditures for the year ended December 31, 2011 were $15.7 million, including spending related to the completion of numerous renovations, such as the Super Pit table games area, The Fringe video poker and sports bar, the new first floor promotions area, cage, and club booth, the new Asteria bar/lounge, and the new valet parking facility.
For the year ending December 31, 2012, capital expenditures are projected to be approximately $44.0 million, including $26.0 million related to our new valet parking facility. The amount and nature of our projected 2012 capital expenditures are subject to obtaining the required financing and regulatory approvals.
(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.
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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.
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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. 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.
Media Contact:
Greektown Superholdings, Inc.
Lloryn Love
313-223-2999, ext. 5455
llove@greektowncasino.com
Investor Contact:
Greektown Superholdings, Inc.
Glen Tomaszewski
Senior Vice President and Chief Financial Officer
313-223-2999, ext. 5458
gtomaszewski@greektowncasino.com
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Greektown Superholdings, Inc.
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Consolidated Statements of Operations (unaudited)
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(In thousands, except share and per share data)
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Successor (1)
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Predecessor (1)
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Year Ended December 31,
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Three Months Ended
December 31,
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Three Months Ended December 31,
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Six Months Ended
December 31,
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Six Months Ended
June 30,
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2011
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2011
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2010
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2010
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2010
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Revenues
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Casino
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$ | 347,396 | $ | 87,293 | $ | 80,968 | $ | 168,061 | $ | 177,429 | ||||||||||
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Food and beverage
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23,158 | 5,923 | 5,264 | 11,164 | 11,924 | |||||||||||||||
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Hotel
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11,004 | 2,764 | 2,106 | 4,675 | 4,628 | |||||||||||||||
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Other
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4,763 | 1,209 | 1,302 | 2,593 | 2,482 | |||||||||||||||
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Gross revenues
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386,321 | 97,189 | 89,640 | 186,493 | 196,463 | |||||||||||||||
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Less promotional allowances
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52,949 | 13,250 | 9,522 | 21,757 | 23,591 | |||||||||||||||
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Net revenues
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333,372 | 83,939 | 80,118 | 164,736 | 172,872 | |||||||||||||||
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Operating expenses
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Casino
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80,496 | 20,611 | 20,528 | 42,890 | 44,291 | |||||||||||||||
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Gaming taxes
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74,961 | 18,903 | 17,233 | 36,065 | 38,469 | |||||||||||||||
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Food and beverage
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18,530 | 4,210 | 4,992 | 8,907 | 7,817 | |||||||||||||||
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Hotel
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9,156 | 2,238 | 2,192 | 4,380 | 4,397 | |||||||||||||||
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Marketing, advertising, and entertainment
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8,287 | 2,857 | 1,653 | 3,149 | 4,146 | |||||||||||||||
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Facilities
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20,215 | 4,970 | 5,248 | 9,984 | 9,689 | |||||||||||||||
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Depreciation and amortization
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37,303 | 8,415 | 10,225 | 20,257 | 10,488 | |||||||||||||||
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General and administrative expenses
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46,072 | 11,377 | 8,292 | 19,310 | 21,437 | |||||||||||||||
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Other
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282 | 14 | 61 | 120 | 105 | |||||||||||||||
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Operating expenses
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295,302 | 73,595 | 70,424 | 145,062 | 140,839 | |||||||||||||||
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Income from operations
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38,070 | 10,344 | 9,694 | 19,674 | 32,033 | |||||||||||||||
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Other expenses
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Interest expense
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(50,167 | ) | (12,330 | ) | (12,355 | ) | (25,425 | ) | (37,489 | ) | ||||||||||
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Amortization of finance fees
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(6,938 | ) | (1,769 | ) | (1,660 | ) | (3,292 | ) | (2,079 | ) | ||||||||||
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Other expense
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(23 | ) | 1 | 8 | (21 | ) | (298 | ) | ||||||||||||
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Net (loss) gain on Chapter 11 related reorganization items from fresh start adjustments
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(1,149 | ) | - | (61 | ) | 317 | 301,352 | |||||||||||||
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Total other (expense) income, net
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(58,277 | ) | (14,098 | ) | (14,068 | ) | (28,421 | ) | 261,486 | |||||||||||
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(Loss) income before provisions for state income taxes
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(20,207 | ) | (3,754 | ) | (4,374 | ) | (8,747 | ) | 293,519 | |||||||||||
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Income tax expense – current
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(1,859 | ) | (439 | ) | (935 | ) | (1,585 | ) | (1,248 | ) | ||||||||||
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Income tax benefit (expense) – deferred
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(2,812 | ) | (1,682 | ) | (4,289 | ) | (3,562 | ) | (1,350 | ) | ||||||||||
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Net (loss) income
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$ | (24,878 | ) | $ | (5,875 | ) | $ | (9,598 | ) | $ | (13,894 | ) | $ | 290,921 | ||||||
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Loss per share:
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Basic
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$ | (295.21 | ) | $ | (70.50 | ) | $ | (99.01 | ) | $ | (160.38 | ) | N/A | |||||||
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Diluted
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$ | (295.21 | ) | $ | (70.50 | ) | $ | (99.01 | ) | $ | (160.38 | ) | N/A | |||||||
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Weighted average common shares outstanding
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142,423 | 144,211 | 140,291 | 140,146 | N/A | |||||||||||||||
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Weighted average common and common equivalent shares outstanding
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142,423 | 144,211 | 140,291 | 140,146 | N/A | |||||||||||||||
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(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.
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Greektown Superholdings, Inc.
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Consolidated Balance Sheets
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(In thousands, except share and per share data)
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December 31,
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December 31,
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2011
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2010
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 50,754 | $ | 30,195 | ||||
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Restricted cash
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– | 5,000 | ||||||
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Certificate of deposit
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– | 534 | ||||||
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Accounts receivable – gaming, less allowance for doubtful accounts of $282 and $1,931 in 2011 and 2010, respectively
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734 | 712 | ||||||
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Accounts receivable – other, less allowance for doubtful accounts of $101 and $151 in 2011 and 2010, respectively
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1,216 | 1,824 | ||||||
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Note receivable
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– | 2,000 | ||||||
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Property tax refund receivable
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– | 3,451 | ||||||
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Inventories
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398 | 383 | ||||||
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Prepaid expenses
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5,605 | 2,106 | ||||||
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Prepaid Michigan Gaming Control Board annual fee
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8,823 | 8,754 | ||||||
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Prepaid municipal service fees
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3,346 | 3,434 | ||||||
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Deposits
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1,631 | 3,793 | ||||||
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Total current assets
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72,507 | 62,186 | ||||||
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Property, building, and equipment, net
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317,085 | 335,608 | ||||||
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Other assets:
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Financing fees - net of accumulated amortization of $5,086 and $1,680 in 2010 and 2011, respectively
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11,571 | 14,854 | ||||||
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Deposits and other assets
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30 | 30 | ||||||
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Casino development rights
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117,800 | 117,800 | ||||||
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Trade names
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26,300 | 26,300 | ||||||
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Rated player relationships - net of accumulated amortization of $20,700 and $6,900 in 2010 and 2011, respectively
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48,300 | 62,100 | ||||||
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Goodwill
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110,252 | 110,252 | ||||||
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Total assets
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$ | 703,845 | $ | 729,130 | ||||
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Greektown Superholdings, Inc.
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Consolidated Balance Sheets
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(In thousands, except share and per share data)
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December 31,
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December 31,
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2011
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2010
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Liabilities and shareholders' equity
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Current liabilities:
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Accounts payable
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15,128 | 12,068 | ||||||
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Taxes payable
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– | 295 | ||||||
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Accrued interest
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25,063 | 25,164 | ||||||
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Unsecured distribution liability
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– | 10,000 | ||||||
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Accrued expenses and other liabilities
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9,631 | 9,626 | ||||||
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Total current liabilities
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49,822 | 57,153 | ||||||
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Long-term liabilities:
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Other accrued income taxes
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8,871 | 8,887 | ||||||
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Senior secured notes - net
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367,748 | 364,218 | ||||||
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Obligation under capital lease
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2,489 | 2,510 | ||||||
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Deferred income taxes
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10,094 | 7,282 | ||||||
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Total long-term liabilities
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389,202 | 382,897 | ||||||
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Total liabilities
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439,024 | 440,050 | ||||||
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Shareholders' equity (members' deficit):
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Series A-1 preferred stock at $0.01 par value;
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1,688,268 shares authorized, 1,463,535 shares issued and outstanding at December 31, 2011 and 2010
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185,396 | 185,396 | ||||||
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Series A-2 preferred stock at $0.01 par value;
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645,065 shares authorized, 162,255 shares issued and outstanding at December 31, 2011 and 2010
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20,551 | 20,551 | ||||||
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Series A-1 preferred warrants at $0.01 par value;
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202,511 shares issued and outstanding at December 31, 2011 and 2010
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25,651 | 25,651 | ||||||
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Series A-2 preferred warrants at $0.01 par value;
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460,587 shares issued and outstanding at December 31, 2011 and 2010
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58,342 | 58,342 | ||||||
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Series A-1 common stock at $0.01 par value;
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4,354,935 shares authorized, 142,423 and 140,291 shares issued and outstanding at December 31, 2011 and 2010, respectively
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1 | 1 | ||||||
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Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued
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– | – | ||||||
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Additional paid-in capital
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13,652 | 13,033 | ||||||
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Accumulated deficit
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(38,772 | ) | (13,894 | ) | ||||
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Total shareholders' equity
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264,821 | 289,080 | ||||||
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Total liabilities and shareholders' equity
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$ | 703,845 | $ | 729,130 | ||||
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Greektown Superholdings, Inc.
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Consolidated Statements of Cash Flows
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(In thousands)
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Successor (1)
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Predecessor (1)
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Year
Ended
December 31,
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Three Months Ended
December 31,
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Three Months Ended
December 31,
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Six Months
Ended
December 31,
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Six Months
Ended
June 30,
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2011
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2011
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2010
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2010
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2010
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Operating activities
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Net (loss) income
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$ | (24,878 | ) | $ | (5,875 | ) | $ | (9,598 | ) | $ | (13,894 | ) | $ | 290,921 | ||||||
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Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
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Depreciation and amortization
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37,303 | 8,415 | 10,225 | 20,257 | 10,488 | |||||||||||||||
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Amortization of finance fees and accretion of discount on senior notes
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6,938 | 1,769 | 1,660 | 3,292 | 2,079 | |||||||||||||||
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Chapter 11 related reorganization items
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1,149 | - | 61 | (317 | ) | (301,352 | ) | |||||||||||||
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Deferred income taxes
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2,812 | 1,682 | 3,580 | 3,562 | 1,350 | |||||||||||||||
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Stock compensation
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619 | 219 | 96 | 175 | - | |||||||||||||||
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Changes in current assets and liabilities:
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- | - | - | - | ||||||||||||||||
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Accounts receivable - gaming
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(22 | ) | (130 | ) | 598 | 980 | 1,684 | |||||||||||||
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Accounts receivable - other
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608 | 79 | (365 | ) | (528 | ) | 460 | |||||||||||||
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Note receivable
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2,000 | 1,900 | - | - | - | |||||||||||||||
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Property tax refund receivable
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3,451 | - | (3,451 | ) | (3,451 | ) | - | |||||||||||||
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State of Michigan gaming tax refundable
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- | - | - | 5,743 | 6,585 | |||||||||||||||
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Inventories
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(15 | ) | (4 | ) | (44 | ) | 30 | 20 | ||||||||||||
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Prepaid expenses
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(1,318 | ) | (10,799 | ) | (7,543 | ) | (5,363 | ) | 4,748 | |||||||||||
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Accounts payable
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3,060 | 1,541 | (1,494 | ) | 5,593 | (6,315 | ) | |||||||||||||
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Accrued PIK interest
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- | - | - | - | (27,783 | ) | ||||||||||||||
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City of Detroit settlement agreement accrual
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- | - | - | - | (13,547 | ) | ||||||||||||||
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Unsecured distribution liability
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(10,000 | ) | - | - | - | - | ||||||||||||||
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Accrued interest
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(101 | ) | 12,513 | 12,196 | 25,164 | - | ||||||||||||||
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Accrued expenses and other liabilities
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(447 | ) | (763 | ) | 167 | (3,823 | ) | 14,029 | ||||||||||||
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Net cash provided by (used in) operating activities before reorganization costs
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21,159 | 10,547 | 6,088 | 37,420 | (16,633 | ) | ||||||||||||||
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Operating cash flows for reorganization costs
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(1,070 | ) | - | (878 | ) | (5,094 | ) | (14,557 | ) | |||||||||||
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Net cash provided by (used in) operating activities
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20,089 | 10,547 | 5,210 | 32,326 | (31,190 | ) | ||||||||||||||
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Investing activities
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Decrease/(increase) in restricted cash
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5,000 | - | (5,000 | ) | (5,000 | ) | - | |||||||||||||
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Capital expenditures
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(15,661 | ) | (5,725 | ) | (4,960 | ) | (9,410 | ) | (5,566 | ) | ||||||||||
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Disposition of real estate and property
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10,681 | - | - | - | ||||||||||||||||
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Redemption of (investment in) certificate of deposit
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534 | – | (1 | ) | -2 | (2 | ) | |||||||||||||
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Net cash provided by (used in) investing activities
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554 | (5,725 | ) | (9,961 | ) | (14,412 | ) | (5,568 | ) | |||||||||||
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Financing activities
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Proceeds from borrowings on long-term notes payable
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- | – | - | - | 362,605 | |||||||||||||||
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Payments on long-term debt
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- | – | - | - | (516,328 | ) | ||||||||||||||
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Payments on notes payable
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- | – | (507 | ) | (983 | ) | (913 | ) | ||||||||||||
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Financing fees paid
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(84 | ) | – | (147 | ) | (332 | ) | (16,702 | ) | |||||||||||
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Proceeds from issuance of stockholders' equity
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– | – | – | 196,000 | ||||||||||||||||
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Net cash (used in) provided by financing activities
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(84 | ) | – | (654 | ) | (1,315 | ) | 24,662 | ||||||||||||
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Net increase (decrease) in cash and cash equivalents
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20,559 | 4,822 | (5,405 | ) | 16,599 | (12,096 | ) | |||||||||||||
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Cash and cash equivalents at beginning of year
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30,195 | 45,932 | 35,600 | 13,596 | 25,692 | |||||||||||||||
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Cash and cash equivalents at end of period
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$ | 50,754 | $ | 50,754 | $ | 30,195 | $ | 30,195 | $ | 13,596 | ||||||||||
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Supplemental disclosure of cash flow information
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Cash paid during the period for interest
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$ | 50,574 | $ | 38 | $ | 93 | $ | 196 | $ | 13,689 | ||||||||||
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Cash paid during the period for income taxes
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$ | 2,288 | $ | 1,732 | $ | - | $ | 760 | $ | 475 | ||||||||||
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(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.
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Greektown Superholdings, Inc.
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Reconciliation of Net (loss) Income to EBITDA
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(In thousands, except share and per share data)
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Successor (1)
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Predecessor (1)
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Year Ended December 31,
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Three Months Ended
December 31,
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Three Months Ended December 31,
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Six Months Ended
December 31,
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Six Months Ended
June 30,
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2011
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2011
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2010 (2)
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2010
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2010
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Net (loss)/Income (1)
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$ | (24,878 | ) | $ | (5,875 | ) | $ | (9,598 | ) | $ | (13,894 | ) | $ | 290,921 | ||||||
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Interest expense
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57,128 | 14,097 | 14,005 | 28,738 | 39,866 | |||||||||||||||
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Income tax expense
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4,671 | 2,121 | 5,224 | 5,147 | 2,598 | |||||||||||||||
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Depreciation and amortization
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37,303 | 8,415 | 10,226 | 20,257 | 10,488 | |||||||||||||||
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EBITDA (3)
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$ | 74,224 | $ | 18,758 | $ | 19,858 | $ | 40,248 | $ | 343,873 | ||||||||||
(1) Successor and Predecessor periods represent the Company adopting fresh-start accounting reporting at June 30, 2010.
(2) EBITDA for the quarter ended December 31, 2010 included income of $3.4 million related to a property tax settlement agreement which retroactively reduced the company’s property tax basis.
(3) EBITDA (earnings before interest, taxes, depreciation and amortization) is a measurement not in accordance with U.S. 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. 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.