Penn National Gaming, Inc. Q1 2010 Earnings Call Transcript
Penn National Gaming, Inc. (PENN)
Q1 2010 Earnings Call
April 22, 2010, 10:00 AM ET
Executives
Joe Jaffoni – IR
Peter Carlino – Chairman of the Board and CEO
Timothy Wilmott – President and COO
William Clifford – CFO
Eric Schippers – VP, Public Affairs
Steven Snyder – Senior Vice President, Corporate Development
Analysts
Felicia Hendrix – Barclays Capital
Larry Klatzkin – Chapdelaine
Carlo Santarelli – JP Morgan
Steve Wieczynski – Stifel Nicolaus
Dennis Forst – Keybanc
Mark Strong – Morgan Stanley
Steven Ruggiero – CRT Capital
Steve Altebrando – Sidoti & Company
Peter Delana – CitiGroup
John Maxwell – Jeffries & Company
Presentation
Operator
Compare to:
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Welcome to the Penn National Gaming first quarter earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session.
(Operator Instructions)
It is now my pleasure to turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead sir.
Joe Jaffoni
Thanks operator, good morning everyone and thank you for joining Penn National Gaming’s 2010 first quarter conference call. We’ll get to management’s comments momentarily as well as your questions and answers, but first I’ll review the Safe Harbor disclosure.
In addition to historical facts or statements of current conditions, today’s conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company’s current expectations and beliefs, but are not guarantees of future performance.
As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today’s news announcement and in the company’s filings with the Securities and Exchange Commission, including the company’s reports on Form 10-K and 10-Q. Penn National Gaming assumes no obligations to publicly update or revise any forward-looking statements.
Today’s call and webcast may also include non-GAAP financial measures within the meaning of SEC Regulation G, when required a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today’s news press release as well as on the company’s website.
Without further delay I’d like to introduce Peter Carlino, the company’s Chairman and CEO. Peter?
Peter Carlino
Thanks very much Joe and good morning everyone and welcome to our first quarter earnings call. Our quarterly results as you can see are okay, not robust but okay. And I think the more important message that we have today concerns the tremendous number of new development opportunities that we currently have underway. We’re doing some pretty exciting things right now, even as we work to manage our business margins more effectively.
It happens that I’m out of the country right now and have a very unreliable phone connection. So I’m going to defer today to Tim and Bill and our entire team in the Penn National conference room and probably just listen through the balance of it and with that I’m going to turn it over to Tim, right now.
Timothy Wilmott
Thanks Peter. Well, clearly the first quarter was one where we really focused on a couple of things as Peter described our development pipeline but we also focused on improving our margins and it was challenging given the amount of weather impact we had certainly in the middle Atlantic states and most notably at our Charles Town facility, but to a lesser extent even at Penn National in Lawrenceburg. And we saw a consumer trends that really were representative of a rollercoaster. We had periods where bad weather occurred and levels were very low and then we had record business volumes when the weather was good.
So right now it’s very difficult to say there is any change in consumer trends in our business from what we saw in the latter part of 2009, consumers are still coming, spend per visit continues to be slightly down. And our reaction to all of this continues to be to focus on a customer-by-customer basis with a high degree of precision improving our margins on our marketing reinvestments, continue to manage labor to business volumes and continue to focus on discretionary spending.
So I think that’s reflective in our results in the first quarter, we’re starting to see some improvements there and we’re working hard to continue those improvements in the second quarter and the balance of the year and stay close to the businesses and stay close to the consumers and really nothing has changed from what we talked about when we were together back in January.
Bill, do you have any further comments?
William Clifford
I think to characterize what we’re doing here is pretty much heads down and working hard, I mean focus on pretty much what Peter and Tim already indicated which is we’re focused on how to do a better job of controlling our margins and we’re working really hard on our construction and new development pipelines pretty much seems at sometimes quite extensive between West Virginia, Pennsylvania, Maryland, Kansas, Ohio, both in Columbus and Toledo, there is more than a full plate to keep everybody fully entertained and fully occupied.
So I think with that we’ll open it up for questions.
Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Felicia Hendrix from Barclays Capital. Please proceed with your question.
Felicia Hendrix
–
Barclays Capital
Tim, you had just, you mentioned the weather in the quarter and particular Lawrenceburg and West Virginia. I’m wondering in Pennsylvania, the revenues came in lighter than our estimates. I’m wondering if we were just being overly optimistic or if there was anything in particularly going on in Pennsylvania as well that might not have met your budget or expectations?
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