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Penn National Gaming Reports Second Quarter Revenue And Adjusted EBITDA Of $712.6 Million And $189.8 Million, Respectively

Stocks in this article: PENN

Penn National Gaming, Inc. (PENN: Nasdaq):

Conference Call: Today, July 24, 2012 at 10:00 a.m. ET

Dial-in number: 212/231-2933



Replay information provided below


Penn National Gaming, Inc. (PENN: Nasdaq) today reported second quarter operating results for the three months ended June 30, 2012, as summarized below:

Summary of Second Quarter Results

(in millions, except per share data)   Three Months Ended

June 30,

    2012 Actual   2012 Guidance (2)   2011 Actual
Net revenues   $ 712.6   $ 711.0   $ 687.9  
Adjusted EBITDA (1)     189.8     187.9     189.6  
Less: Impact of stock compensation, insurance recoveries and deductible charges, depreciation and amortization, gain/loss on disposal of assets, interest expense - net, income taxes, and other expenses     (123.1 )   (120.5 )   (113.6 )
Net income   $ 66.7   $ 67.4   $ 76.0  
Diluted earnings per common share   $ 0.63   $ 0.64   $ 0.71  



Adjusted EBITDA is income (loss) from operations, excluding the impact of stock compensation, insurance recoveries and deductible charges, depreciation and amortization, and gain or loss on disposal of assets, and is inclusive of gain or loss from unconsolidated affiliates. A reconciliation of net income (loss) per accounting principles generally accepted in the United States of America (“GAAP”) to adjusted EBITDA, as well as income (loss) from operations per GAAP to adjusted EBITDA, is included in the accompanying financial schedules.



The figures in this column present the guidance Penn National Gaming provided on April 19, 2012 for the three months ended June 30, 2012.


Review of Second Quarter 2012 Results vs. Guidance and Second Quarter 2011 Results

  Three Months
June 30, 2012
    Pre-tax After-tax
    (in thousands)
Income, per guidance (1)   $ 110,496   $ 67,402  
Property and unconsolidated affiliates results     2,632     1,553  
Deal costs for Harrah's St. Louis transaction     (751 )   (473 )
Foreign currency translation gain     1,154     726  
Other     (565 )   (333 )
Income tax rate variance from guidance     -     (2,208 )
Income, as reported   $ 112,966   $ 66,667  
Three Months Ended
June 30,
    2012   2012 Guidance (1) 2011
Diluted earnings per common share   $ 0.63   $ 0.64   $ 0.71  
Deal costs for Harrah's St. Louis transaction and other     0.01     -     -  
Foreign currency translation gain     (0.01 )   -     -  
Insurance deductible charges for Hollywood Casino Tunica flood     -     -     0.03  
Final insurance settlement for Hollywood Casino Joilet fire     -     -     (0.10 )
M Resort transaction costs     -     -     0.01  
Income tax rate variance from guidance (2)     -     (0.02 )   (0.10 )
Diluted earnings per common share excluding items not included in guidance   $ 0.63   $ 0.62   $ 0.55  



The guidance figures in the tables above present the guidance Penn National Gaming provided on April 19, 2012 for the three months ended June 30, 2012.



The variance from guidance for the three months ended June 30, 2011 related primarily to a FIN 48 reserve reversal.


Peter M. Carlino, Chairman and Chief Executive Officer of Penn National Gaming commented, “While second quarter regional gaming market revenues generally softened from the pace of the first quarter, six of the sixteen properties that Penn National Gaming operated for both periods recorded year-over-year revenue increases. More significantly, eight of these sixteen properties generated adjusted EBITDA gains in the second quarter relative to the comparable year-ago period. Reflecting these results, our second quarter revenue and adjusted EBITDA both exceeded guidance. Reported adjusted EBITDA of $189.8 million reflects $2.6 million of property operating results that exceeded the expectations in our guidance and was inclusive of $8.0 million of total pre-opening expenses. In addition, reported adjusted EBITDA was impacted by $0.8 million of costs not anticipated in the guidance related to our agreement during the second quarter to acquire Harrah’s St. Louis, which we anticipate will close in the fourth quarter. The Company’s second quarter 2012 adjusted EBITDA margins declined compared to the prior year due to a $6.6 million increase in preopening and acquisition related transaction costs. However, adjusted EBITDA margins are consistent for both periods once these costs are excluded.

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