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Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2018 Operating Results

03/05/2018 05:30

Source: PR News

Category: Tourismembassy News

UNCASVILLE, Conn., May 3, 2018 /PRNewswire/ -- Mohegan Gaming & Entertainment, or MGE, the owner and operator of Mohegan Sun in Uncasville, Connecticut, and Mohegan Sun Pocono in Wilkes-Barre, Pennsylvania, announced today the operating results for its second fiscal quarter ended March 31, 2018.

"We are pleased with our fiscal second quarter revenues and earnings performance, as our properties performed admirably despite a combination of challenging comparisons, the imposition of additional gaming taxes in Pennsylvania and several weather disruptions at all of our Northeastern properties in the quarter," said Mario Kontomerkos, Chief Executive Officer of MGE. "Also during the quarter, we reached an amicable agreement to purchase our South Korean partner's stake in Project Inspire, thereby bringing MGE's ownership in the project to 100% and furthering our diversification efforts in Asia, the world's fastest-growing major gaming and entertainment market. Here in Connecticut, we look forward to the addition of the Mohegan Sun Exposition and Convention Center, slated to open this summer, which will continue to position Mohegan Sun as the premier gaming and entertainment destination in the Northeast for years to come."

Consolidated operating results for the second quarter ended March 31, 2018 (unaudited):

  • Net revenues of $332.0 million, a 1.4% decrease from the second quarter of fiscal 2017
  • Gaming revenues of $288.7 million, a 1.7% decrease from the second quarter of fiscal 2017
  • Gross slot revenues of $197.6 million, relatively flat compared to the second quarter of fiscal 2017
  • Table game revenues of $92.3 million, a 2.5% decrease from the second quarter of fiscal 2017
  • Non-gaming revenues of $66.0 million, relatively flat compared to the second quarter of fiscal 2017
  • Income from operations of $56.1 million, a 5.6% decrease from the second quarter of fiscal 2017
  • Net income attributable to MGE of $28.6 million, a 9.1% decrease from the second quarter of fiscal 2017
  • Adjusted EBITDA, a non-GAAP measure described below, of $79.9 million, a 6.3% decrease from the second quarter of fiscal 2017

Lower gaming revenues at both Mohegan Sun and Mohegan Sun Pocono were driven principally by a combination of lower overall hold and more difficult hold comparisons to the prior period. Collectively, these were the primary contributors to the year-over-year declines in Adjusted EBITDA, net income attributable to MGE and income from operations. Results at Mohegan Sun Pocono were also negatively impacted by an increase in slot taxes assessed by the Commonwealth of Pennsylvania.

 

 

Mohegan Sun

Operating results (in thousands, unaudited):  










For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Adjusted EBITDA

$                 77,746

$           81,988

$        (4,242)

(5.2%)

Income from operations

$                 57,779

$           66,485

$        (8,706)

(13.1%)

Operating costs and expenses

$               202,575

$         198,509

$          4,066

2.0%

Net revenues

$               260,354

$         264,994

$        (4,640)

(1.8%)

Gaming revenues

$               226,131

$         229,912

$        (3,781)

(1.6%)

Non-gaming revenues

$                 52,714

$           53,467

$           (753)

(1.4%)






 

Despite strong overall gaming volumes, Mohegan Sun experienced declines in Adjusted EBITDA and income from operations primarily due to lower gaming revenues resulting from decreases in year-over-year hold percentages for both slots and table games. The declines in Adjusted EBITDA and income from operations also reflected higher medical insurance costs, partially offset by lower casino marketing and promotional expenses. Overall results for the quarter were somewhat impacted by a difficult comparison to the prior period and a weaker entertainment calendar featuring fewer headliner shows. Adjusted EBITDA margin declined slightly to 29.9% for the quarter ended March 31, 2018 from 30.9% in the second quarter of fiscal 2017.

 

  

Selected gaming data (in thousands, except where noted, unaudited):

For the Three Months Ended  


March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Slots:






  Handle

$            1,823,811

$        1,794,537

$          29,274

1.6%

  Gross revenues 

$               146,653

$           147,464

$              (811)

(0.5%)

  Net revenues 

$               140,205

$           142,213

$           (2,008)

(1.4%)

  Free promotional slot plays (1)

$                 14,961

$             14,593

$                368

2.5%

  Weighted average number of machines (in units)

4,830

5,009

(179)

(3.6%)

  Hold percentage (gross)

8.0%

8.2%

(0.2%)

(2.4%)

  Win per unit per day (gross) (in dollars)

$                      337

$                  327

$                 10

3.1%






Table games:






  Drop

$               475,461

$           468,837

$            6,624

1.4%

  Revenues

$                 82,745

$             84,516

$          (1,771)

(2.1%)

  Weighted average number of games (in units)

275

274

1

0.4%

  Hold percentage (2)

17.4%

18.0%

(0.6%)

(3.3%)

  Win per unit per day (in dollars)

$                   3,348

$               3,432

$               (84)

(2.4%)






Poker:






  Revenues 

$                   2,266

$               2,363

$               (97)

(4.1%)

  Weighted average number of tables (in units)

42

42

-

-

  Revenue per unit per day (in dollars)

$                      600

$                  625

$               (25)

(4.0%)

___________________________________________






(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.



(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods. 

 

  

Non-gaming data (in thousands, except where noted, unaudited):

For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Food and beverage:






  Revenues

$                 15,643

$           15,613

$               30

0.2%

  Meals served

708

721

(13)

(1.8%)

  Average price per meal served (in dollars)

$                   15.92

$             15.62

$            0.30

1.9%






Hotel:






  Revenues

$                 13,723

$           13,794

$             (71)

(0.5%)

  Rooms occupied

133

135

(2)

(1.5%)

  Occupancy rate

94.4%

96.5%

(2.1%)

(2.2%)

  Average daily room rate (in dollars)

$                      100

$                  99

$                 1

1.0%

  Revenue per available room (in dollars)

$                        94

$                  95

$               (1)

(1.1%)






Retail, entertainment and other:






  Revenues

$                 23,348

$           24,060

$           (712)

(3.0%)

  Arena events (in events)

30

30

-

-

  Arena tickets 

178

184

(6)

(3.3%)

  Average price per Arena ticket (in dollars)

$                   33.56

$             38.84

$          (5.28)

(13.6%)

 

 

Mohegan Sun Pocono

Operating results (in thousands, unaudited):

For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Adjusted EBITDA 

$                 12,230

$           12,657

$           (427)

(3.4%)

Income from operations

$                   8,872

$             9,691

$           (819)

(8.5%)

Operating costs and expenses

$                 58,258

$           58,612

$           (354)

(0.6%)

Net revenues

$                 67,130

$           68,303

$        (1,173)

(1.7%)

Gaming revenues

$                 62,604

$           63,824

$        (1,220)

(1.9%)

Non-gaming revenues

$                   8,698

$             9,133

$           (435)

(4.8%)

The declines in Adjusted EBITDA and income from operations primarily resulted from higher slot taxes driven, in part, by a 1% increase in slot taxes assessed by the Commonwealth of Pennsylvania which went into effect on January 1, 2018. The declines in Adjusted EBITDA and income from operations were also driven by lower overall gaming revenues. In general, the decreases in gaming and non-gaming revenues reflected lower overall business volumes driven, in part, by a repositioning of our promotional offers. These results were partially offset by lower payroll costs. Adjusted EBITDA margin declined slightly to 18.2% for the quarter ended March 31, 2018 from 18.5% in the second quarter of fiscal 2017.

 

  

Selected gaming data (in thousands, except where noted, unaudited):   

For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Slots:






  Handle

$               606,051

$            626,828

$      (20,777)

(3.3%)

  Gross revenues

$                 50,904

$              51,091

$           (187)

(0.4%)

  Net revenues

$                 50,831

$              51,276

$           (445)

(0.9%)

  Free promotional slot plays (1)

$                   9,653

$              10,860

$        (1,207)

(11.1%)

  Weighted average number of machines (in units)

2,331

2,235

96

4.3%

  Hold percentage (gross)

8.4%

8.2%

0.2%

2.4%

  Win per unit per day (gross) (in dollars)

$                      242

$                   255

$             (13)

(5.1%)






Table games:






  Drop

$                 48,342

$              47,923

$             419

0.9%

  Revenues

$                   9,512

$              10,129

$           (617)

(6.1%)

  Weighted average number of games (in units)

73

73

-

-

  Hold percentage (2)

19.7%

21.1%

(1.4%)

(6.6%)

  Win per unit per day (in dollars)

$                   1,448

$                1,542

$             (94)

(6.1%)






Poker:






  Revenues 

$                      566

$                   655

$             (89)

(13.6%)

  Weighted average number of tables (in units)

18

18

-

-

  Revenue per unit per day (in dollars)

$                      376

$                   404

$             (28)

(6.9%)

___________________________________________






(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.





(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods. 

 

    

Non-gaming revenues (in thousands, except where noted, unaudited):




For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance






Food and beverage:






  Revenues

$                   5,527

$             6,118

$           (591)

(9.7%)

  Meals served

107

121

(14)

(11.6%)

  Average price per meal served (in dollars)

$                   20.74

$             21.42

$          (0.68)

(3.2%)






Hotel:






  Revenues

$                   1,234

$             1,125

$             109

9.7%

  Rooms occupied

18

19

(1)

(5.3%)

  Occupancy rate

82.6%

90.9%

(8.3%)

(9.1%)

  Average daily room rate (in dollars)

$                        62

$                  55

$                 7

12.7%

  Revenue per available room (in dollars)

$                        52

$                  50

$                 2

4.0%






Retail, entertainment and other:   






  Revenues

$                   1,937

$             1,890

$               47

2.5%

 

 

Corporate

Operating results (in thousands, unaudited):

For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

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