Foxwoods reports big drop in earnings
Mashantucket - Days after announcing the weekday closing of a portion of its gaming floor, a move that will cost 70 dealers' jobs, Foxwoods Resort Casino reported a hefty decline in quarterly earnings.
In a filing posted late last week, the Mashantucket Pequot-owned casino listed EBITDA - earnings before interest, taxes, depreciation and amortization - of $35.1 million for the three months that ended March 31, was down $21.2 million, or 37.6 percent, over the same period in 2013.
For the six months that ended March 31, Foxwoods' EBITDA was down 30.7 percent.
While lenders and financial analysts consider EBITDA a particularly useful measure of performance in the gaming industry, other indicators were down, too. Foxwoods' net revenue for the quarter, $235.1 million, declined 8.9 percent over the same quarter in 2013.
The Mohegan Tribal Gaming Authority, which announced its quarterly earnings weeks ago, reported that Mohegan Sun's EBITDA was $63.3 million, down 9.8 percent. Its net revenue of $243.5 million was down 3.6 percent.
Citing economic pressures, Foxwoods announced early last week that it was taking steps to "improve operational efficiency." Foxwoods management said that starting June 9, it will shut down the slot machines and some table games in the Rainmaker Casino area from 4 a.m. Monday to 9 a.m. Friday.
Over the weekend, Foxwoods notified the table-games dealers' union, Local 2121 of the United Auto Workers, that management is cutting 70 dealers' positions, including 50 full-time dealers and 20 "dual-rates" who serve at times in supervisory roles. Nonunion supervisors also could be laid off, according to casino sources.
The effective date of the dealer layoffs has yet to be determined, but will not be sooner than June 15, Billy Shea, president of the local, wrote in an online posting to union members.
In laying off about 125 dealers and dual rates in March, Foxwoods offered severance packages to volunteers before imposing involuntary layoffs in accordance with seniority, as specified by the union contract.
Some workers in other departments, including unionized beverage servers and nonunion security personnel, could also lose their jobs.
In its quarterly filing, Foxwoods, which last year completed a restructuring of the Mashantuckets' long-term debt in the wake of a 2009 default, pointed to the dual pressures of growing competition and the weak regional economy's effect on consumer spending.
New York City's Resorts World Casino has cut into the Connecticut casinos' share of the slots market, while in Rhode Island, Twin River Casino's 2013 introduction of table games has hurt Foxwoods' table-games revenue, according to Foxwoods' quarterly report.
Foxwoods said it was able to partially offset the revenue declines by lowering its operating expenses. In the quarter that ended March 31, its payroll costs were down by $3.1 million, or 3.5 percent, over the same quarter the previous year.
"We believe, over the long term, that our focus on elimination of unprofitable lines of business and reinvestment in quality patrons will lead to a sustainable level of profitability," the report says.
With revenues dropping at their Connecticut properties, the Mashantucket Pequots and the Mohegan Tribe, which owns Mohegan Sun, continue to pursue out-of-state ventures. Foxwoods, which hopes to win a license for a Fall River, Mass., casino, reportedly is now interested in finding a significantly larger site than the one it had originally targeted.
Mohegan Sun, a candidate for a Greater Boston casino license, has proposed a project in Revere.
Both Foxwoods and Mohegan Sun are also connected with separate partnerships seeking to develop casino projects in New York's Catskills region.
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