Thursday, January 27, 2011

Mohegan Gaming Authority Reports 1st Quarter Profit Of $12.9 Million

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The Mohegan Tribal Gaming Authority reported a profit of $12.9 million for the first quarter of fiscal year 2011. The first quarter is comprised of the three-month period of October through December. The figures include results at Mohegan Sun and the Tribe's Pocono Downs casino in Pennsylvania.

The profits are not reduced by the $4.5 million distributed to the Tribal government by the gaming authority in the first quarter. Last year, MTGA distributed $27.3 million to the Tribe in the same period.

The quarterly profit is an increase over the $3.9 million in net income, adjusted from $4.4 million, reported for the same three-month period in 2009 despite declining revenues in all categories except for table game revenue.

MTGA's overall gross revenues (money spent by customers at the casino properties and before deducting any expenses) for the three months were $361 million, down from $370 million for the same period last year.

MTGA reported that its Pennsylvania casino's income from operations, which doesn't take into account interest expenses, was $6.3 million for the quarter. This figure is a $4 million increase over the income from operations during the same period last year. Had interest expenses on debt related to the Pennsylvania casino been deducted from this figure, the result would be a loss.

The increase in MTGA's total table game revenue over last year is attributable to the addtion of table games in July at the Tribe's Pennsylvania casino.

MTGA reported $4.6 million in expenses over the three-month period related to its corporate diversification department. These costs represent about 30 percent of the quarterly profits. Diversification efforts have largely been focused on opening a possible casino in Massachusetts. Legislation to allow casino gambling has not yet been approved in that Massachusetts.

MTGA reported $68.5 million in adjusted EBITDA (which stands for earnings before interest expense, taxes, depreciation and amortization), a 7.3 percent increase over last year. The structure of a transaction between MTGA and the Mohegan Sun's former casino management company, which results in payments by MTGA to that company through 2014, ensures that the adjusted EBITDA figure will always reflect an increase through 2014, assuming all other variables being equal.

Interest expense for the three-month period was about $30 million, a slight increase over the same period last year, due to an increase in the weighted average interest rate of 7.1 percent on MTGA's debt compared to the weighted average interest rate of 6.8 percent reported for the same period last year.

MTGA had $1.7 billion in debt as of December 31, 2010 and reported that it hired Credit Suisse, to "assist in the evaluation of refinancing alternatives." MTGA reported last year that it engaged Blackstone Advisory Partners, L.P. to "assist in its strategic planning relating to its debt maturities."

MTGA's quarterly conference call with analysts will take place later this morning.

See press release at: http://www.sec.gov/Archives/edgar/data/1005276/000119312511015478/dex991.htm