Twin River Casinos Worldwide had reason to relish the moment and anticipate the future Thursday. The company posted earnings per share and revenue that topped Wall Street forecasts and said acquiring the Bally brand will fuel future success.
Twin River said Oct. 11 that it paid Caesars Entertainment Corp. $20 million for the Bally name, brand, and intellectual property. On Wednesday, Twin River said it will become Bally Corp. on Nov. 9.
In a Thursday morning statement, Twin River said its net income was $6.7 million, or 22 cents per share, for the three months ended Sept. 30, down from net income of $7 million, or 18 cents per share, a year earlier. Analysts surveyed by Seeking Alpha had, on average, forecast 13 cents per share in earnings.
Twin River’s earnings before interest, taxes, depreciation, and amortization, a cash flow measure that excludes one-time costs, rose 6.7% to $38 million from $35.6 million.
Third-quarter revenue fell 9.8% to $116.6 million from $129.3 million and topped the $107.2 million forecast of Seeking Alpha-polled analysts. The company said coronavirus pandemic-triggered, state-imposed limitations on property patron counts, gaming positions, and other amenities dampened overall revenue.
Investors cheered the results, sending Twin River shares up 59 cents, or 2.48%, Thursday to close at $24.34 on the New York Stock Exchange.
COVID didn’t dampen everything. Twin River CEO George Papanier said results at the Isle of Capri Casino in Kansas City, Missouri, and the Lady Luck in Vicksburg, Mississippi, which Twin River bought for $230 million from Eldorado Resorts in July 2019, drove the adjusted EBITDA increase, even amid the aforementioned pandemic-triggered restrictions.
The company said operational efficiencies helped limit the coronavirus damage. Third-quarter income from operations rose 9% year-over-year to $23.4 million; operating margin increased 346 basis points to 20.05%, aided by labor savings, reduced marketing, and promotional spending.
The company seems poised to thrive with its new name. Over the next months, when it finalizes deals for five casinos in five states, the new Bally Corp. will operate 14 casinos in 10 states.
On Oct. 1, Twin River agreed to buy Jumer’s, a hotel-casino in Rock Island, Illinois, from Delaware North Companies Gaming & Entertainment for $120 million in cash. The transaction is expected to close in the 2021 second quarter, given regulatory OKs.
On Tuesday, Twin River agreed to buy the Tropicana Evansville casino in Indiana from Caesars Entertainment Corp. for $140 million. As part of the acquisition, Gaming and Leisure Properties Inc., a publicly-traded gaming-focused real estate investment trust, will acquire the property’s real estate and lease it to Twin River.
Twin River is working through regulatory approvals on its other pending acquisitions. The company expects to close its deal to buy Bally’s Atlantic City and Eldorado Shreveport in Louisiana in mid-November 2020 and close its deal to buy MontBleu in Lake Tahoe, Nevada, in 2021’s first half. Twin River agreed to buy the three casinos from Caesars Entertainment Corp. and Eldorado Resorts for $155 million in April.
When the announced deals close, the company will have about 16,000 slot machines or video lottery terminals, 550 table games, and more than 3,900 hotel rooms.
“Our disciplined approach has preserved flexibility and moderated financial leverage to levels that have allowed us to have the liquidity to better deal with the kind of uncontrollable events 2020 has dealt us,” Papanier said. “Our first announced sale-leaseback transaction highlights, even during these challenging times, the untapped potential of our predominantly owned real estate portfolio.”
Follow Matthew Crowley on Twitter at @copyjockey
