Increased overhead, amortization expense and acquisition costs were factors in a second-quarter decline in net income from a year earlier for Twin River Worldwide Holdings. The company’s earnings per share and revenue both missed Wall Street forecasts.
Company leaders were bullish on new acquisitions — the company has agreed to acquire five hotel-casinos since January — and suggested more deals may follow. But a share sell-off by investors caused a nearly 12 percent dip in the stock price.
In a statement, the Providence, Rhode Island-based Twin River, which runs four hotel-casinos and a horseracing track in four states, said its net income was $17.2 million, or 42 cents per diluted share, for the three months ended June 30, down from net income of $20.3 million, or 49 cents per diluted share, a year earlier.
Analysts surveyed by Zacks Investment Research had, on average, forecast earnings of 55 cents per share.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, rose 7.1 percent, to $47.5 million, from $44.3 million.
Revenue rose $29.2 million to $143.2 million, up from $110.8 million, but missed the $147.5 million forecast of Zacks-polled analysts.
Twin River shares dropped $2.76, or 11.79 percent, Monday to close at $20.65 on the New York Stock Exchange. The shares have fallen 31 percent since their initial listing in March.
Twin River said its merger with Dover Downs, which closed in January and had no disclosed price, contributed $25.8 million of revenue in the second quarter. The company likely hopes a flurry of recent acquisitions proves as fruitful.
In January, Twin River looked to expand further, agreeing to buy Affinity Gaming’s three Black Hawk, Colorado, hotel-casinos – Golden Gates, Golden Gulch and Mardi Gras – for an undisclosed price. The deal is expected to close in 2020’s first quarter.
In July, Twin River also agreed to buy the Isle of Capri Casino in Kansas City, Missouri, and the Lady Luck Vicksburg in Mississippi, for $230 million in cash.
“Our emphasis of focusing on in-market and out-of-market accretive growth is also proving itself in the early going as we continue to grow prudently into a multistate operator based in Rhode Island versus a single regional operator,” Twin River President and Chief Executive Officer George Papanier said in a statement accompanying the results.
During a conference call with analysts and journalists later in the day, Papanier went further, saying the company will continue to consider expansion, especially in the South and Midwest regional markets.
“We are out looking at a lot of assets,” he said. “However, we will continue to be very disciplined, with a focus on acquiring assets that we believe fit our strategy and provide the best opportunity for delivering enhanced shareholder returns.”
Papanier also addressed his company’s opposition to the $1 billion, no-bid, 20-year deal that would require the state’s lottery to get 85 percent of its 5,000-plus electronic gambling machines from International Game Technology, although state law now caps the number at 50 percent.
Twin River has bought a full-page ad in the Providence Journal newspaper and launched social media campaigns on Twitter and Facebook aiming to stop the deal, which Rhode Island Gov. Gina Raimondo has backed.
“The machines provided by IGT are significantly underperforming the machines provided by IGT’s competitors in our Rhode Island facilities,” Papanier said. “We feel the ability to work with the state as operator to manage our gaming floor and ensure the best product mix on the casino floor will result in increased revenue for both the state and Twin River.”
Follow Matthew Crowley on Twitter @copyjockey.
