MTR Gaming Group, Inc. (MNTG) Q1 2010 Earnings Call Transcript May 10, 2010 4:30 pm ET Executives William Schmitt – IR, ICR Bob Griffin – President & CEO Dave Hughes – EVP & CFO Analysts Larry Klatzkin – Chapdelaine & Company Inc. Kevin Coyne – Goldman Sachs Asset Management Steve Altebrando – Sidoti & Company Joe Hudak – Wells Fargo Advisors Zvi Rhine [ph] – Hilco Trading [ph] James Kayler – Banc of America Securities Justin Sebastiano – Morgan, Joseph & Company Presentation Operator
Finally, under certain circumstances the federal securities laws may require the Company to file a transcript of this call, including your questions, with the SEC. Accordingly, if you ask a question the Company will assume that you have consented to the inclusion of your questions and identity in any such required file.It is now my pleasure to introduce your host Bob Griffin, President, CEO of MTR Gaming. Bob? Bob Griffin Thank you, Bill and good afternoon everyone. Overall, the Company had an average quarter. We got off to strong start in January and then in February we experienced the highest amount of snowfall for the region on record. And then March came around and the properties came back nicely. And Mountaineer Park, we performed very well. We were only down 3% in EBITDA over prior year and it was not only with the snowstorm but the addition of the rivers and the Meadows permanent facility into the marketplace. Presque down to EBIT declined 12.2%. The property was not only affected by the record snowfall, but they didn't react effectively as Mountaineer Park did. Our general manager resigned during the quarter. Now we have a general manager starting next Monday. I'd also like to point out that we'd $375,000 in severance and pre-opening cost in that number and $370,000 increase in real estate taxes in the quarter. In April, the Company received our table games license in Pennsylvania. Our construction project is on time and off budget, and we expect to open our tables in July with the approval of the Pennsylvania Game and Control Board. We believe that this is going to be a very positive step for us based on the lower tax rate in Pennsylvania. The Company continues to work for a positive VoIP legislation in Ohio while we stay focused on our operating businesses, and with that I'll turn it over to Dave Hughes, our Executive Vice President and Chief Financial Officer.
Dave HughesThank you, Bob. A couple of things before you get into the figures. On March 18th, we replaced our amended and restated credit facility with a $20 million senior secured delayed draw term loan credit facility of which we due $10 million of closing with deposit at $10 million in the bank that have a set of size for our licensing fee payment of $16.5 million to table games for Pennsylvania. The facility will mature on March 18 2013 and a term commitment terminates to the earliest of 18th month anniversary of the closing date with the date of term loan is permanently reduced zero. The facility has an interest rate of LIBOR plus 7% and contains customer covenants including restrictions on additional debt, payments of dividends, making start of new investment and disposable of certain assets. They must also maintain certain maximum of leverage ratio, some interest coverage ratio and then the EBITDA and the maximum capital expenditures. In cash Binion [ph] property, we will require to provide some guarantees which expired on March 31st, 2010. During the quarter we paid $200,000 security events of defaults regarding leases that TLC was to pay. This concludes our charges for discontinued operations owned in small administrative and legal fees that aren't really significant on an ongoing forward base. We continue to purse offers to starting our Non-Core Land and sold off our old track wagering facility land in Erie for $1.350 million resulting in a gain of $76,000 and certain costs over the West Virginia were sold for $157,000 of which was approximate to our book value. For the first quarter of 2010, the company's adjusted EBITDA from continuing operations was $16.6 million, down 14% after charges, as Bob mentioned a $300,000 for severance and $75,000 for pre-opening cost related to Presque Isle Downs table games. Read the rest of this transcript for free on seekingalpha.com