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Penn National Gaming Reports Second Quarter Revenue Of $652.1 Million And Adjusted EBITDA Of $82.1 Million, Inclusive Of $104.6 Million Of Rent Expense

Stocks in this article: PENN

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


Conference Call:


Today, July 24, 2014 at 10:00 a.m. ET

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Replay information provided below


Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National Gaming”, “Penn” or the “Company”) today reported second quarter operating results for the three months ended June 30, 2014, as summarized below.

Summary of Second Quarter Results


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

June 30,

      2014 Actual     2014 Guidance (3)     2013 Actual
Net revenues (1)     $ 652.1       $ 640.5       $ 761.4  
Adjusted EBITDAR (1)       186.7         183.2         214.3  
Rental expense related to Master Lease       (104.6 )       (104.3 )       -  
Adjusted EBITDA (2)       82.1         78.9         214.3  
Less: Impact of stock compensation, impairment losses, insurance recoveries and deductible charges, depreciation and amortization, gain/loss on disposal of assets, interest expense - net, income taxes and other expenses       (79.3 )       (73.4 )       (226.5 )
Net income (loss)     $ 2.8       $ 5.5       $ (12.2 )
Diluted earnings (loss) per common share (4)     $ 0.03       $ 0.06       $ (0.16 )
(1) Adjusted EBITDAR is adjusted EBITDA excluding rent expense associated with our Master Lease with Gaming and Leisure Properties, Inc. (“GLPI”). Results for the three months ended June 30, 2013 included net revenues of $46.1 million and adjusted EBITDAR of $12.7 million related to Hollywood Casino Perryville and Hollywood Casino Baton Rouge that were contributed to GLPI on November 1, 2013 as part of the spin-off.
(2) Adjusted EBITDA is income (loss) from operations, excluding the impact of stock compensation, impairment losses, insurance recoveries and deductible charges, depreciation and amortization and gain or loss on disposal of assets. Adjusted EBITDA is also inclusive of income or loss from unconsolidated affiliates, with our share of the non-operating items added back for our joint venture in Kansas Entertainment, LLC (“Kansas Entertainment”). A reconciliation of net income (loss) per accounting principles generally accepted in the United States of America (“GAAP”) to adjusted EBITDA and adjusted EBITDAR, as well as income (loss) from operations per GAAP to adjusted EBITDA and adjusted EBITDAR, is included in the accompanying financial schedules.
(3) The guidance figures in the table above present the guidance Penn National Gaming provided on April 24, 2014 for the three months ended June 30, 2014, adjusted to add back our share of the impact of non-operating items for our joint venture in Kansas Entertainment.
(4) Since the Company reported a loss from operations for the three months ended June 30, 2013, it was required by GAAP to use basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding, when calculating diluted loss per common share.

Review of Second Quarter 2014 Results vs. Guidance

    Three Months
June 30, 2014
Pre-tax   After-tax
(in thousands)
Income, per guidance (1) $ 14,854   $ 5,494
EBITDA variances:
Positive operating segment variance excluding Argosy Casino Sioux City 2,184 1,028
Argosy Casino Sioux City negative variance (1,438 ) (891 )
Positive corporate overhead due to lower liability based stock compensation   2,507       1,512  
Total EBITDA variances from guidance 3,253 1,649
Impairment charge for Lawrenceburg vessel (4,560 ) (2,830 )
Other (617 ) (373 )
Tax variance   -       (1,160 )
Income, as reported $ 12,930     $ 2,780  
Three Months Ended
June 30,
2014   2014 Guidance (1)
Diluted earnings per common share $ 0.03 $ 0.06
Argosy Casino Sioux City shortfall 0.01 -
Liability based stock compensation (0.02 ) -
Impairment charge for Lawrenceburg vessel 0.03 -
Tax variance   -       (0.02 )
Total $ 0.05     $ 0.04  
(1) The guidance figures in the tables above present the guidance Penn National Gaming provided on April 24, 2014 for the three months ended June 30, 2014.

Timothy J. Wilmott, President and Chief Executive Officer of Penn National Gaming, commented, “Second quarter consolidated revenue, adjusted EBITDAR and adjusted EBITDA exceeded guidance as our property-level operating results benefited from a somewhat more stable operating environment and continued strong margins.

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