Attached files
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| 8-K - CURRENT REPORT - Greektown Superholdings, Inc. | grktwn-8k_041213.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
April 12, 2013
Greektown Superholdings, Inc. Reports Fourth Quarter and Full Year 2012 Financial Results
DETROIT, April 12, 2013 – Greektown Superholdings, Inc. (“Greektown” or the “company”) today reported financial results for its fourth quarter and full year ended December 31, 2012. Financial highlights for the fourth quarter include:
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Net revenues for the three months ended December 31, 2012 were $76.9 million compared to $83.9 million for the same quarter of 2011, a decrease of 8.4%.
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Income from operations for the fourth quarter decreased to $8.8 million compared to $10.3 million a year ago.
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Net loss increased to $9.5 million compared to $5.9 million a year ago, inclusive of $1.7 million of fourth quarter 2012 expense associated with the expiration of the company’s previously-announced refinancing.
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EBITDA(1) decreased by 23.2%, to $14.4 million in the fourth quarter of 2012 from $18.8 million in the same quarter of 2011, inclusive of $1.7 million of fourth quarter 2012 expense associated with the expiration of the company’s previously-announced refinancing.
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“Continuing weakness in the Detroit gaming market, among other factors, created a challenging environment for revenue growth in the fourth quarter,” said Michael Puggi, Greektown’s president and chief executive officer. “We were able, however, to partially mitigate the impact of the market decline through a 7.5% reduction of operating expenses. Furthermore, we are excited by the recent completion of several significant property improvements, which we believe will attract new guests while appealing to our existing guests.”
“These improvements include a greatly enhanced dining experience at Greektown Casino-Hotel,” continued Puggi. “In December of 2012 we opened Brizola, a fine dining restaurant conveniently located adjacent to the casino floor. For guests interested in a more casual dining experience, we opened the Market District, a collection of five distinctive outlets, in February of 2013. Together, these offerings represent fresh and exciting new dining alternatives.”
“We also opened our new, 900 space valet parking garage on February 7, 2013. This facility creates additional parking capacity, and we anticipate that its proximity to the casino floor will dramatically improve the guest experience. We believe that the new garage, as well as the numerous other property renovations made over the past eighteen months, strengthens Greektown’s competitive position.”
Exhibit 99.1
Year-To-Date Results
Financial highlights for the year ended December 31, 2012 include:
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Net revenues for the twelve months ended December 31, 2012 were $331.7 million compared to $333.4 million for the same period of 2011, a decrease of 0.5%.
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Income from operations for the twelve months ended December 31, 2012 increased to $43.6 million compared to $38.1 million a year ago.
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Net loss decreased to $23.8 million compared to $24.9 million a year ago.
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EBITDA decreased by 0.9%, to $73.5 million for the twelve months ended 2012 from $74.2 million in the same period of 2011.
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Net loss and EBITDA for the twelve months ended December 31, 2012 included $1.7 million of expense associated with the expiration of the company’s previously-announced refinancing. Net loss for the twelve months ended December 31, 2011 included $3.8 million of deferred income tax benefit related to the repeal of the Michigan Business Tax.
Financial Position
Cash and cash equivalents were $49.4 million at December 31, 2012, compared to $50.8 million at December 31, 2011. The company’s borrowing capacity under its existing revolving credit facility was approximately $30.0 million at December 31, 2012, after consideration of $15.0 million of outstanding borrowings made in the fourth quarter of 2012 to fund construction of the new valet parking garage.
The company’s capital expenditures for the year ended December 31, 2012 were $40.3 million, including $24.1 million of spending related to the new valet parking garage, investments in new slot machines, and expenditures to introduce a new fine-dining restaurant, Brizola, and a new market-style dining venue, the Market District. Capital expenditures for the first quarter of 2013 are expected to approximate $7.5 million, including spending related to the completion of the new valet parking garage.
(1) 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. Reconciliation of net loss 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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Exhibit 99.1
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 Asteria, The Fringe, 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 became the first Michigan casino to debut a smartphone application. For more information, visit greektowncasinohotel.com.
Safe Harbor Statement
Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about capitalization and performance of Greektown. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and words such as “anticipate,” “expect,” “will,” “continue,” or other similar words or phrases are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in other press releases, written statements or documents filed with the Securities and Exchange Commission are subject to known and unknown risks, uncertainties and contingencies, and there can be no assurance that the expected benefits of our new projects will be realized. 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.
Tony Williams
313-223-2999, ext. 5144
awilliams@greektowncasino.com
Investor Contact:
Greektown Superholdings, Inc.
Glen Tomaszewski
Senior Vice President, Chief Financial Officer and Treasurer
313-223-2999, ext. 5467
gtomaszewski@greektowncasino.com
Exhibit 99.1
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Greektown Superholdings, Inc.
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Consolidated Statements of Operation
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(In thousands, except share and per share data)
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Three months ended December 31,
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Twelve months ended December 31,
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2012
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2011
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2012
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2011
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Revenues
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Casino
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$ | 79,703 | $ | 87,293 | $ | 346,544 | $ | 347,396 | ||||||||
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Food and beverage
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5,330 | 5,923 | 22,827 | 23,158 | ||||||||||||
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Hotel
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2,801 | 2,764 | 12,117 | 11,004 | ||||||||||||
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Other
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1,366 | 1,209 | 5,414 | 4,763 | ||||||||||||
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Gross revenues
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89,200 | 97,189 | 386,902 | 386,321 | ||||||||||||
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Less promotional allowances
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12,303 | 13,250 | 55,186 | 52,949 | ||||||||||||
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Net revenues
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76,897 | 83,939 | 331,716 | 333,372 | ||||||||||||
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Operating expenses
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Casino
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18,511 | 20,611 | 79,169 | 80,496 | ||||||||||||
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Gaming taxes
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17,309 | 18,903 | 74,823 | 74,961 | ||||||||||||
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Food and beverage
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3,350 | 4,210 | 15,492 | 18,530 | ||||||||||||
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Hotel
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2,355 | 2,238 | 10,019 | 9,156 | ||||||||||||
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Marketing, advertising, and entertainment
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2,360 | 2,857 | 7,899 | 8,287 | ||||||||||||
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Facilities
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4,818 | 4,970 | 19,907 | 20,215 | ||||||||||||
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Depreciation and amortization
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7,641 | 8,415 | 32,264 | 37,303 | ||||||||||||
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General and administrative expenses
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11,643 | 11,377 | 48,155 | 46,072 | ||||||||||||
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Other
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96 | 14 | 370 | 282 | ||||||||||||
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Operating expenses
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68,083 | 73,595 | 288,098 | 295,302 | ||||||||||||
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Income from operations
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8,814 | 10,344 | 43,618 | 38,070 | ||||||||||||
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Other (expenses) income
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Interest expense, net
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(12,674 | ) | (12,330 | ) | (50,581 | ) | (50,167 | ) | ||||||||
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Amortization of finance fees and accretion of discount on senior notes
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(1,929 | ) | (1,769 | ) | (7,540 | ) | (6,938 | ) | ||||||||
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Refinancing expense
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(1,732 | ) | – | (1,732 | ) | – | ||||||||||
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Other expense
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(323 | ) | 1 | (622 | ) | (1,172 | ) | |||||||||
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Total other expense, net
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(16,658 | ) | (14,098 | ) | (60,475 | ) | (58,277 | ) | ||||||||
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Loss before income taxes
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(7,844 | ) | (3,754 | ) | (16,857 | ) | (20,207 | ) | ||||||||
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Income tax income (expense) – current
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10 | (439 | ) | (211 | ) | (1,859 | ) | |||||||||
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Income tax expense - deferred
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(1,682 | ) | (1,682 | ) | (6,727 | ) | (2,812 | ) | ||||||||
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Net loss
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$ | (9,516 | ) | $ | (5,875 | ) | $ | (23,795 | ) | $ | (24,878 | ) | ||||
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Loss per share:
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Basic
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$ | (90.07 | ) | $ | (70.50 | ) | $ | (274.64 | ) | $ | (295.21 | ) | ||||
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Diluted
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$ | (90.07 | ) | $ | (70.50 | ) | $ | (274.64 | ) | $ | (295.21 | ) | ||||
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Weighted average common shares outstanding
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153,293 | 144,211 | 149,146 | 142,423 | ||||||||||||
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Weighted average common and common equivalent shares outstanding
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153,293 | 144,211 | 149,146 | 142,423 | ||||||||||||
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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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2012
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2011
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 49,442 | $ | 50,754 | ||||
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Accounts receivable – gaming, net
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710 | 734 | ||||||
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Accounts receivable – other, net
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1,397 | 1,216 | ||||||
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Inventories
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458 | 398 | ||||||
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Prepaid expenses
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3,902 | 5,605 | ||||||
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Prepaid Michigan Gaming Control Board annual fee
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9,104 | 8,823 | ||||||
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Prepaid municipal services fees
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3,411 | 3,346 | ||||||
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Deposits
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1,632 | 1,631 | ||||||
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Total current assets
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70,056 | 72,507 | ||||||
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Property, building, and equipment, net
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342,417 | 317,085 | ||||||
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Other assets:
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Financing fees - net of accumulated amortization
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8,235 | 11,571 | ||||||
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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
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34,500 | 48,300 | ||||||
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Goodwill
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110,252 | 110,252 | ||||||
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Total assets
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$ | 709,590 | $ | 703,845 | ||||
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Liabilities and shareholders' equity
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Current liabilities:
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Accounts payable
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17,503 | 15,128 | ||||||
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Accrued interest
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25,125 | 25,063 | ||||||
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Accrued expenses and other liabilities
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9,858 | 9,631 | ||||||
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Current portion of revolving credit facility
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3,000 | — | ||||||
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Total current liabilities
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55,486 | 49,822 | ||||||
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Long-term liabilities:
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Other accrued income taxes
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9,165 | 8,871 | ||||||
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Revolving credit facility, less current portion
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12,000 | — | ||||||
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Senior secured notes - net
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371,843 | 367,748 | ||||||
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Obligation under capital lease
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2,472 | 2,489 | ||||||
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Deferred income taxes
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16,821 | 10,094 | ||||||
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Total long-term liabilities
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412,301 | 389,202 | ||||||
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Total liabilities
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467,787 | 439,024 | ||||||
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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 September 30, 2012 and December 31, 2011
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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 September 30, 2012 and December 31, 2011
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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 September 30, 2012 and December 31, 2011
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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 September 30, 2012 and December 31, 2011
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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,152,054 and 142,423 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively
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1 | 1 | ||||||
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Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued
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— | — | ||||||
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Additional paid-in capital
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14,429 | 13,652 | ||||||
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Accumulated deficit
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(62,567 | ) | (38,772 | ) | ||||
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Total shareholders' equity
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241,803 | 264,821 | ||||||
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Total liabilities and shareholders' equity
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$ | 709,590 | $ | 703,845 | ||||
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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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| Twelve months ended December 31, | ||||||||
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2012
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2011
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Operating activities
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Net loss
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$ | (23,795 | ) | $ | (24,878 | ) | ||
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Adjustments to reconcile net loss net cash provided by operating activities:
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Depreciation and amortization
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32,264 | 37,303 | ||||||
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Amortization of finance fees and accretion of discount on senior notes
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7,540 | 6,938 | ||||||
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Deferred income taxes
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6,727 | 2,812 | ||||||
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Stock based compensation
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777 | 619 | ||||||
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Changes in current assets and liabilities:
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Accounts receivable - gaming
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24 | (22 | ) | |||||
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Accounts receivable - other
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(181 | ) | 608 | |||||
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Notes 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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(60 | ) | (15 | ) | ||||
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Prepaid expenses
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1,356 | (1,318 | ) | |||||
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Accounts payable
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(1,121 | ) | 3,060 | |||||
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Unsecured distribution liability
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— | (10,000 | ) | |||||
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Accrued interest
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62 | (101 | ) | |||||
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Accrued expenses and other liabilities
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503 | (368 | ) | |||||
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Net cash provided by operating activities
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24,096 | 20,089 | ||||||
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Investing activities
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Decrease in restricted cash
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— | 5,000 | ||||||
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Capital expenditures
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(40,300 | ) | (15,661 | ) | ||||
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Disposition of real estate
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— | 10,681 | ||||||
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Redemption of certificate of deposit
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— | 534 | ||||||
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Net cash (used in) provided by investing activities
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(40,300 | ) | 554 | |||||
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Financing activities
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Borrowings under revolving credit facility
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15,000 | — | ||||||
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Financing fees paid
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(108 | ) | (84 | ) | ||||
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Net cash provided by (used in) financing activities
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14,892 | (84 | ) | |||||
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Net (decrease) increase in cash and cash equivalents
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(1,312 | ) | 20,559 | |||||
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Cash and cash equivalents at beginning of period
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50,754 | 30,195 | ||||||
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Cash and cash equivalents at end of period
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$ | 49,442 | $ | 50,754 | ||||
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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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$ | 50,210 | $ | 50,754 | ||||
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Cash paid during the period for income taxes
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$ | — | $ | 2,288 | ||||
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Reconciliation of Net Loss to EBITDA (1)
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(In thousands)
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Three months ended December 31,
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Twelve months ended December 31,
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2012
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2011
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2012
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2011
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Net loss
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$ | (9,516 | ) | $ | (5,875 | ) | $ | (23,795 | ) | $ | (24,878 | ) | ||||
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Other expense
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14,603 | 14,099 | 58,121 | 57,105 | ||||||||||||
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Income tax expense
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1,672 | 2,121 | 6,938 | 4,671 | ||||||||||||
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Depreciation and amortization
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7,641 | 8,415 | 32,264 | 37,303 | ||||||||||||
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EBITDA (1)
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$ | 14,400 | $ | 18,760 | $ | 73,528 | $ | 74,201 | ||||||||
(1) 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.