Mohegan Gaming quarter beats expectations
Mohegan - Despite posting across-the-board revenue declines for the first three months of the year, the Mohegan Tribal Gaming Authority experienced "a really, really good quarter," according to the authority's chief executive officer.
Many expected the authority's quarterly results, released Thursday, to be far worse given the impact of February's horrific weather, Mitchell Etess said following a conference call with gaming-industry analysts.
"Everybody realizes that we're dealing with some extraordinary circumstances," he said, referring in particular to the Feb. 8 blizzard that devastated a weekend's business at Mohegan Sun in Uncasville. "When you look at EBITDA (earnings before interest, income taxes, depreciation and amortization) not decreasing that much compared to how much net revenue decreased, that's a positive thing to the people who study gaming for a living."
While Mohegan Sun's net revenue of $252.7 million was down 7.5 percent over the same quarter in 2012, the casino's adjusted EBITDA of $70.1 million was only down 5.5 percent.
The authority, which operates the Uncasville casino and Mohegan Sun at Pocono Downs near Wilkes-Barre, Pa., touts adjusted EBITDA as the leading indicator of how efficiently it's operating.
Overall, the authority reported net revenue of $325.7 million for the quarter, a 7.3 percent decline over the same quarter in 2012. Gaming revenue of $291.4 million was down 7.8 percent and nongaming revenue of $55.2 million was down 4.3 percent.
Net income, or profit, of $14.1 million was down 6.8 percent.
Etess said during the conference call that business trends in March and April have been encouraging. He noted that Mohegan Sun's slot-machine revenue was down only 1 percent in March and said he expects a decline in April to be in the low single digits as well. Mohegan Sun's February slot revenue was down 18.6 percent. The authority estimated that unfavorable weather during the quarter cost Mohegan Sun $9.5 million in net revenue.
Bobby Soper, president and chief executive officer of Mohegan Sun, told analysts the casino had partially offset the declining revenues through cost savings associated with a workforce reduction last September and more efficient marketing. He said the casino had made changes in its Asian bus program, eliminating certain runs to New York and Boston.
On the corporate side, the authority spent $7.6 million during the quarter on professional and development-related expenses, some of it in connection with its pursuit of a casino license in Massachusetts, where it hopes to build and operate a destination resort in the town of Palmer.
The authority distributed $10 million to the Mohegan Tribe in the quarter and expects to distribute a total of $50 million to the tribe in the 2013 fiscal year, which ends Sept. 30.
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