Attached files
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| 8-K - CURRENT REPORT - Greektown Superholdings, Inc. | grktn-8k_081413.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
August 14, 2013
Greektown Superholdings, Inc. Reports Second Quarter 2013 Financial Results
DETROIT, August 14, 2013 – Greektown Superholdings, Inc. (“Greektown” or the “company”) today reported financial results for its second quarter ended June 30, 2013. Financial highlights for the second quarter include:
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Net revenues for the three months ended June 30, 2013 were $79.7 million compared to $83.5 million for the same quarter of 2012, a decrease of 4.6%.
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Income from operations for the second quarter decreased to $7.5 million compared to $9.9 million a year ago.
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Net loss attributable to Greektown Superholdings, Inc. decreased to $3.3 million compared to $6.3 million a year ago.
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EBITDA(1) decreased to $14.0 million in the second quarter of 2013 from $18.5 million in the same quarter of 2012. EBITDA for the second quarter of 2013 included approximately $0.9 million of costs related to the company’s ownership transition.
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“The continued softness of the Detroit gaming market during the second quarter negatively impacted our financial performance,” said Michael Puggi, Greektown’s president and chief executive officer. “We are focused, however, on driving operational improvements designed to refine our marketing capabilities, to increase the level of service to our guests and enhance the appeal of our property.”
Due to the significance of the ownership interest in Greektown acquired by Athens Acquisition LLC in April 2013, Greektown’s assets and liabilities were revalued based on their fair values at the date Athens acquired a controlling interest in the Company, effective April 1, 2013. Accordingly, a new basis of accounting has been established and, for accounting purposes, the old entity (referred to as the “Predecessor” in the accompanying financial statements) has been terminated and a new entity (referred to as the “Successor”) has been created. In addition, the acquisition by Athens during the second quarter of 2013 resulted in reduced depreciation and amortization expense and other non-operating expenses.
(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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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 Brizola, The Market District, 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 opened a new 900 space valet parking garage in February 2013. 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.
John Truscott
517-485-9320
jtruscott@truscottrossman.com
Investor Contact:
Greektown Superholdings, Inc.
Glen Tomaszewski
Senior Vice President, Chief Financial Officer and Treasurer
313-223-2999, ext. 5467
gtomaszewski@greektowncasino.com
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Greektown Superholdings, Inc.
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(In Thousands, except share and per share data)
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Successor
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Predecessor
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Three Months Ended June 30,
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Three Months Ended June 30,
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Three Months Ended March 31,
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Six Months Ended June 30,
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2013
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2012
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2013
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2012
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Revenues
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Casino
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$ | 85,243 | $ | 87,861 | $ | 85,613 | $ | 183,229 | ||||||||
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Food and beverage
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6,194 | 5,845 | 5,939 | 12,265 | ||||||||||||
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Hotel
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3,411 | 3,110 | 3,070 | 6,060 | ||||||||||||
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Other
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1,524 | 1,361 | 1,491 | 2,698 | ||||||||||||
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Gross revenues
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96,372 | 98,177 | 96,113 | 204,252 | ||||||||||||
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Less promotional allowances
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16,670 | 14,646 | 15,035 | 28,884 | ||||||||||||
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Net revenues
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79,702 | 83,531 | 81,078 | 175,368 | ||||||||||||
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Operating expenses
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Casino
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19,027 | 20,189 | 19,649 | 41,430 | ||||||||||||
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Gaming taxes
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18,388 | 18,880 | 18,552 | 39,444 | ||||||||||||
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Food and beverage
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4,261 | 4,007 | 4,287 | 8,765 | ||||||||||||
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Hotel
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2,632 | 2,493 | 2,685 | 5,110 | ||||||||||||
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Marketing, advertising, and entertainment
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2,262 | 2,459 | 2,014 | 3,794 | ||||||||||||
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Facilities
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5,158 | 4,838 | 5,389 | 10,107 | ||||||||||||
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Depreciation and amortization
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6,358 | 8,548 | 7,595 | 17,180 | ||||||||||||
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General and administrative expenses
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13,060 | 12,050 | 12,036 | 24,390 | ||||||||||||
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Ownership transition expenses
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896 | — | 2,964 | — | ||||||||||||
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Other
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143 | 166 | 131 | 309 | ||||||||||||
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Operating expenses
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72,185 | 73,630 | 75,302 | 150,529 | ||||||||||||
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Income from operations
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7,517 | 9,901 | 5,776 | 24,839 | ||||||||||||
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Other expense
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Interest expense, net
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(12,729 | ) | (12,598 | ) | (12,755 | ) | (25,251 | ) | ||||||||
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Amortization of finance fees and accretion of premium (discount) on senior notes
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2,721 | (1,844 | ) | (2,007 | ) | (3,681 | ) | |||||||||
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Refinancing expense
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(157 | ) | — | (235 | ) | — | ||||||||||
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Other income (expense)
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267 | 2 | (188 | ) | 57 | |||||||||||
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Total other expense, net
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(9,898 | ) | (14,440 | ) | (15,185 | ) | (28,875 | ) | ||||||||
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Loss before provision for income taxes
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(2,381 | ) | (4,539 | ) | (9,409 | ) | (4,036 | ) | ||||||||
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Income tax expense – current
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(74 | ) | (73 | ) | (64 | ) | (146 | ) | ||||||||
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Income tax expense – deferred
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(1,499 | ) | (1,682 | ) | (1,682 | ) | (3,364 | ) | ||||||||
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Net loss
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$ | (3,954 | ) | $ | (6,294 | ) | $ | (11,155 | ) | $ | (7,546 | ) | ||||
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Net loss attributable to noncontrolling interest
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(690 | ) | — | — | — | |||||||||||
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Net loss attributable to Greektown Superholdings, Inc.
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(3,264 | ) | (6,294 | ) | (11,155 | ) | $ | (7,546 | ) | |||||||
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Loss per share attributable to Greektown Superholdings, Inc.:
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Basic
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$ | (44.77 | ) | $ | (72.49 | ) | $ | (100.10 | ) | $ | (110.64 | ) | ||||
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Diluted
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$ | (44.77 | ) | $ | (72.49 | ) | $ | (100.10 | ) | $ | (110.64 | ) | ||||
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Weighted average common shares outstanding
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168,770 | 146,028 | 154,312 | 145,786 | ||||||||||||
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Weighted average common and common equivalent shares outstanding
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168,770 | 146,028 | 154,312 | 145,786 | ||||||||||||
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Greektown Superholdings, Inc.
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(In thousands, except share and per share data)
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Successor
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Predecessor
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June 30,
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December 31,
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2013
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2012
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(unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 50,981 | $ | 49,442 | ||||
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Accounts receivable – gaming, net
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622 | 710 | ||||||
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Accounts receivable – other, net
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1,745 | 1,397 | ||||||
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Inventories
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452 | 458 | ||||||
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Prepaid expenses
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4,547 | 3,902 | ||||||
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Prepaid Michigan Gaming Control Board annual fee
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3,808 | 9,104 | ||||||
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Prepaid municipal service fees
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1,229 | 3,411 | ||||||
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Deposits
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1,633 | 1,632 | ||||||
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Total current assets
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65,017 | 70,056 | ||||||
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Property, building, and equipment, net
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343,591 | 342,417 | ||||||
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Other assets:
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Financing fees - net of accumulated amortization
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— | 8,235 | ||||||
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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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185,700 | 117,800 | ||||||
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Trade names - net of accumulated amortization
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13,965 | 26,300 | ||||||
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Rated player relationships - net of accumulated amortization
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17,385 | 34,500 | ||||||
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Goodwill
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117,107 | 110,252 | ||||||
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Total assets
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$ | 742,795 | $ | 709,590 | ||||
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Liabilities and shareholders' equity
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Current liabilities:
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Accounts payable
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11,918 | 17,503 | ||||||
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Accrued interest
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25,187 | 25,125 | ||||||
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Accrued expenses and other liabilities
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11,448 | 9,858 | ||||||
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Current portion of revolving credit facility
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3,000 | 3,000 | ||||||
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Total current liabilities
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51,553 | 55,486 | ||||||
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Long-term liabilities:
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Other accrued income taxes
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9,312 | 9,165 | ||||||
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Leasehold liability
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1,899 | — | ||||||
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Revolving credit facility, less current portion
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11,250 | 12,000 | ||||||
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Senior secured notes - net
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409,229 | 371,843 | ||||||
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Obligation under capital lease
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4,757 | 2,472 | ||||||
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Deferred income taxes
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38,193 | 16,821 | ||||||
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Total long-term liabilities
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474,640 | 412,301 | ||||||
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Total liabilities
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526,193 | 467,787 | ||||||
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Shareholders' equity:
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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 June 30, 2013 and December 31, 2012
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131,718 | 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 June 30, 2013 and December 31, 2012
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14,603 | 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 June 30, 2013 and December 31, 2012
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18,226 | 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 June 30, 2013 and December 31, 2012
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41,453 | 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, 168,770 and 152,054 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively
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1 | 1 | ||||||
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Series A-2 common stock at $0.01 par value; 645,065 shares authorized, no shares issued
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— | — | ||||||
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Additional paid-in capital
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10,275
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14,429
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Accumulated deficit
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(3,264 | ) | (62,567 | ) | ||||
| Total Greektown Superholdings, Inc. shareholders' equity | 213,012 | 241,803 | ||||||
| Noncontrolling interest |
3,590
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— | ||||||
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Total shareholders' equity
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216,602 | 241,803 | ||||||
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Total liabilities and shareholders' equity
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$ | 742,795 | $ | 709,590 | ||||
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Greektown Superholdings, Inc.
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(In Thousands)
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Successor
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Predecessor
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Three Months Ended June 30,
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Three Months Ended March 31,
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Six Months Ended June 30,
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2013
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2013
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2012
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Operating activities
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Net loss
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$ | (3,954 | ) | $ | (11,155 | ) | $ | (7,546 | ) | |||
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
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Depreciation and amortization
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6,358 | 7,595 | 17,180 | |||||||||
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Amortization of finance fees and accretion of (premium) discount on senior notes
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(2,721 | ) | 2,007 | 3,681 | ||||||||
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Deferred income taxes
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1,499 | 1,682 | 3,364 | |||||||||
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Stock based compensation
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871 | 198 | 323 | |||||||||
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Changes in current assets and liabilities:
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Accounts receivable - gaming
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(2 | ) | 90 | 39 | ||||||||
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Accounts receivable - other
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(83 | ) | (265 | ) | 47 | |||||||
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Inventories
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(15 | ) | 21 | 45 | ||||||||
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Prepaid expenses
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5,367 | 1,465 | 6,902 | |||||||||
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Accounts payable
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(2,782 | ) | (2,803 | ) | (2,712 | ) | ||||||
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Accrued interest
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12,509 | (12,447 | ) | 19 | ||||||||
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Accrued expenses and other liabilities
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(2,819 | ) | 10,106 | 945 | ||||||||
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Net cash provided by (used in) operating activities
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14,228 | (3,506 | ) | 22,287 | ||||||||
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Investing activities
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Capital expenditures
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(904 | ) | (7,529 | ) | (14,496 | ) | ||||||
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Net cash used in investing activities
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(904 | ) | (7,529 | ) | (14,496 | ) | ||||||
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Financing activities
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Payments on revolving credit facility
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(750 | ) | — | — | ||||||||
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Financing fees paid
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— | — | (108 | ) | ||||||||
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Net cash used in financing activities
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(750 | ) | — | (108 | ) | |||||||
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Net increase (decrease) in cash and cash equivalents
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12,574 | (11,035 | ) | 7,683 | ||||||||
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Cash and cash equivalents at beginning of period
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38,407 | 49,442 | 50,754 | |||||||||
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Cash and cash equivalents at end of period
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$ | 50,981 | $ | 38,407 | $ | 58,437 | ||||||
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Greektown Superholdings, Inc.
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Reconciliation of Net Loss to EBITDA (1)
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(In thousands)
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Successor
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Predecessor
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Three months ended June 30,
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Three Months Ended June 30,
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Three months ended March 31,
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Six months ended June 30,
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2013
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2012
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2013
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2012
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Net loss
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$ | (3,954 | ) | $ | (6,294 | ) | $ | (11,155 | ) | $ | (7,546 | ) | ||||
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Interest expense
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10,008 | 14,442 | 14,762 | 28,932 | ||||||||||||
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Income tax expense
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1,573 | 1,755 | 1,746 | 3,510 | ||||||||||||
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Depreciation and amortization
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6,358 | 8,548 | 7,595 | 17,180 | ||||||||||||
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EBITDA (1)
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$ | 13,985 | $ | 18,451 | $ | 12,948 | $ | 42,076 | ||||||||
(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.