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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 26, 2000
MTR GAMING GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-20508 84-1103135
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
State Route 2, South, P.O. Box 356
Chester, West Virginia 26034
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (304) 387-5712
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS:
On April 26, 2000, the Board of Directors of MTR Gaming Group, Inc.
(the "Company") authorized the repurchase of up to $3 million of the Company's
common shares. The repurchase program authorizes management, at its discretion,
to make purchases from time to time over the next year in the open market.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Not applicable.
(b) Not applicable.
(c) EXHIBITS
EXHIBIT 99.1: Press Release dated May 2, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MTR GAMING GROUP, INC.
a Delaware corporation
/s/ Robert L. Ruben
-------------------------------------
Robert L. Ruben
Vice President
Date: May 3, 2000
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EXHIBIT INDEX
Exhibit 99.1 Press Release dated May 2, 2000.
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Exhibit 99.1
FOR RELEASE AT 7:30 A.M. 5.2.00
CONTACT: Edson R. Arneault, President
MTR Gaming Group
304/387-8300
Christine DiSanto/Tom Ryan/Brendon Frey
Integrated Corporate Relations
203/222-9013
MTR GAMING GROUP ANNOUNCES RECORD FIRST QUARTER
FINANCIAL RESULTS
-- EPS RISES 225% TO $0.13; EBITDA MORE THAN DOUBLES TO $7.6 MILLION --
-- BOARD OF DIRECTORS AUTHORIZES $3 MILLION SHARE REPURCHASE PROGRAM --
-- NEGOTIATES AMENDMENT TO CREDIT FACILITY WITH WELLS FARGO BANK --
Chester, West Virginia, May 2, 2000 -- MTR Gaming Group, Inc. (Nasdaq:
MNTG) today announced its results of operations for the first quarter ended
March 31, 2000. These results represent the 21st consecutive quarter of
increased revenue and EBITDA over the corresponding prior year quarter.
First quarter earnings before interest, taxes, depreciation and
amortization (EBITDA) rose dramatically to $7.6 million, an increase of 113.4%
compared to $3.5 million in 1999. EBITDA margins for the first quarter reached
20.9% versus 16.1% in the comparable period of 1999. Total revenues increased
64.9% to $36.3 million versus $22.0 million in the first quarter of last year.
Gross profit improved 88.1% to $13.5 million compared to $7.2 million in the
first quarter of 1999, while operating income rose 139% to $6.0 million versus
$2.5 million last year. Net income in the first quarter increased 244.7% to $3.4
million, compared to $977,000 in the same period last year. Diluted earnings per
share rose more than three-fold to $0.13 on 25,531,059 diluted weighted average
shares outstanding, compared to diluted earnings per share of $0.04 on
23,941,022 diluted weighted average shares last year.
WEST VIRGINIA
Net win from gaming operations at the Company's Mountaineer Racetrack
and Gaming Resort totaled $30.9 million for the first quarter, an increase of
63.4% compared to $18.9 million in the same period last year. Net
win-per-day-per-machine for the first quarter of 2000 rose substantially to $253
compared to $163 in the first quarter of 1999.
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Page: 2
NEVADA
For the first quarter of 2000, casino revenues at the Company's two
Nevada properties totaled $846,000, while non-casino revenues were $754,000. The
Company's Speedway Casino at the Ramada Inn in North Las Vegas held its grand
opening in March, and the Speakeasy Casino in Reno celebrated its grand opening
ceremony in late April.
Edson R. Arneault, MTR Gaming President, stated, "Our exceptional
results this quarter reflect ongoing momentum at our Mountaineer resort in West
Virginia, as well as contributions from our two newest properties in Nevada. We
are pleased to note that the year is off to a great start, with financial
performance exceeding our expectations across all measures."
"Looking ahead, we are very enthusiastic about our long-term expansion
plans in West Virginia, which will allow us to capitalize on the strong market
demand and continue the momentum we are experiencing. We have embarked on a $50
million planned investment that we believe will contribute to continued growth
in EBITDA and earnings over the long-term. The expansion program includes a new
speakeasy theme, approximately 55,000 square feet of new gaming space, an
additional 1,100 video lottery terminals (subject to regulatory approval), 220
hotel rooms, a convention center, golf course, retail shops and restaurants over
the next 12-18 months."
Mr. Arneault added, "We are also continuing to invest in building the
Mountaineer brand through aggressive and innovative marketing programs, which is
yielding very positive results. Indeed, we are particularly proud of our ability
to deliver solid operating profits and EBITDA margins in excess of 20%, while at
the same time making strategic investments to propel our growth well into the
future. We believe the Company is ideally positioned to benefit from a
combination of several factors this year. First and foremost is MTR's proven
operating model, which has enabled us to report consistent quarterly growth in
revenues and EBITDA over the past five years. Importantly, we are leveraging
that model to take further advantage of the compelling market demographics in
the West Virginia vicinity. Additionally, recent favorable legislation in the
state removed restrictions on the number of slot machines at Mountaineer's
hotel, providing us with an important source of growth in 2000 and beyond, as
slots at the hotel have historically outperformed those at the racetrack. And
finally, we are utilizing our marketing expertise to benefit from the untapped
potential in our new Nevada markets."
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Page: 3
The Company also announced that on April 26, 2000, its Board of
Directors authorized the repurchase of up to $3 million of MTR Gaming Group's
common shares. The repurchase program authorizes management, at its discretion,
to make purchases from time to time over the next year in the open market. The
Company also received approval from Wells Fargo Bank, which has waived MTR's
loan covenants in support of the repurchase program. Commenting on this action,
Mr. Arneault stated, "The repurchase program reflects management's belief that,
at current levels, MTR Gaming shares represent an attractive long-term
investment for the Company and its shareholders." At May 1, 2000, the Company
had 21.3 million shares outstanding and the closing price of MTR Gaming common
stock on Nasdaq was $3.1563.
Separately, MTR announced that it has negotiated an amendment to its
credit facility with Wells Fargo Bank, National Association. The new agreement
eliminates MTR Gaming's obligation to make principal payments during the course
of the first phase of the West Virginia expansion and renovation, expected to be
completed by September, 2000. Mr. Arneault concluded, "This amendment will allow
us to immediately deploy capital toward our expansion in West Virginia, where we
expect to generate strong returns on our investment."
MTR Gaming Group, Inc., a West Virginia based corporation, through
subsidiaries, owns and operates the Mountaineer Racetrack & Gaming Resort in
Chester, West Virginia, the Ramada Inn and Speedway Casino in North Las Vegas,
and the Ramada Inn and Speakeasy Casino in Reno, Nevada. The Mountaineer complex
currently encompasses a thoroughbred racetrack, including off track betting,
1,355 video lottery terminals, a 101-room hotel, golf course, fine dining and
entertainment, and the Speakeasy Gaming Saloon.
EXCEPT FOR HISTORICAL INFORMATION, THIS PRESS RELEASE CONTAINS
FORWARD-LOOKING STATEMENTS CONCERNING, AMONG OTHER THINGS, FUTURE PLANS AND
OPERATING RESULTS. SUCH STATEMENTS ARE BASED ON THE COMPANY'S CURRENT PLANS AND
EXPECTATIONS. ACTUAL RESULTS COULD DIFFER MATERIALLY BASED UPON A NUMBER OF
FACTORS, INCLUDING BUT NOT LIMITED TO WEATHER CONDITIONS, ADVERSE CHANGES IN
WEST VIRGINIA VIDEO LOTTERY LAWS OR THE RATES OF TAXATION OF VIDEO LOTTERY
OPERATIONS, LEGALIZATION OF NEW FORMS OF GAMING BY NEIGHBORING STATES, WHICH
WOULD LEAD TO INCREASED COMPETITION, COMPETITION, GENERAL ECONOMIC CONDITIONS
AFFECTING THE RESORT BUSINESS, DEPENDENCE UPON KEY PERSONNEL, MARKET ACCEPTANCE
OF THE COMPANY'S NEVADA PROPERTIES, MAINTAINING THE "GRANDFATHERED" STATUS OF
THE NEVADA PROPERTIES, TIMELY INSTALLATION OF COIN DROP SLOTS AND OTHER FACTORS
DESCRIBED IN THE COMPANY'S PERIODIC REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
(tables to follow)
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MTR GAMING GROUP, INC.
CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
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2000 1999
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<S> <C> <C>
Revenues
Video lottery terminals............................................. $31,747,000 $18,916,000
Parimutuel commissions.............................................. 1,100,000 914,000
Food, beverage and lodging.......................................... 2,966,000 1,809,000
Other............................................................... 443,000 342,000
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Total revenues.................................................... 36,256,000 21,981,000
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Costs of revenue
Cost of video lottery terminals..................................... 18,465,000 11,521,000
Cost of parimutuel commissions...................................... 1,315,000 1,217,000
Cost of food, beverage and lodging.................................. 2,623,000 1,793,000
Cost of other revenues.............................................. 371,000 284,000
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Total cost of revenues............................................ 22,774,000 14,815,000
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Gross Profit.......................................................... 13,482,000 7,166,000
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Selling, general and administrative expenses:
Marketing and promotions............................................ 1,561,000 840,000
General and administrative.......................................... 4,355,000 2,782,000
Depreciation and amortization....................................... 1,540,000 1,024,000
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Total selling, general and administrative expenses................ 7,456,000 4,646,000
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Operating income...................................................... 6,026,000 2,520,000
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Interest income....................................................... 69,000 83,000
Interest expense...................................................... (820,000) (1,101,000)
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Income from continuing operations before income taxes................. 5,275,000 1,502,000
Provision for income taxes............................................ (1,907,000) (525,000)
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Income before extraordinary item...................................... 3,368,000 977,000
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Net income per share (basic)
Continuing operations............................................... $ 0.16 $ 0.05
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Net income per share $ 0.16 $ 0.05
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Net income per share (assuming dilution)
Continuing operations............................................... $ 0.13 $ 0.04
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Net income per share $ 0.13 $ 0.04
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Weighted average number of shares outstanding:
Basic............................................................... 21,337,885 20,896,322
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Diluted............................................................. 25,524,155 23,941,022
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</TABLE>
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MTR GAMING GROUP, INC.
CONDENSED AND CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
2000 1999
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<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents .............................................. $ 7,523,000 $ 7,380,000
Restricted cash ........................................................ 440,000 891,000
Accounts receivable, net of allowance
for doubtful accounts of $48,000 and $138,000 ........................ 1,458,000 1,026,000
Deferred financing costs ............................................... 244,000 244,000
Income tax receivable .................................................. 519,000
Deferred income taxes .................................................. 1,526,000
Other current assets ................................................... 2,115,000 1,575,000
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Total current assets ..................................................... 11,780,000 13,161,000
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Property and equipment, net .............................................. 55,947,000 52,756,000
Excess of cost of investments over net assets acquired, net of accumulated
amortization of $1,841,000 and $1,778,000 ............................ 1,933,000 1,996,000
Deferred income taxes .................................................... 330,000
Deferred financing costs, net of current portion ......................... 916,000 977,000
Deposits and other ....................................................... 654,000 669,000
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3,833,000 3,642,000
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$ 71,560,000 $ 69,559,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ....................................................... $ 491,000 $ 1,453,000
Other accrued liabilities .............................................. 2,203,000 1,746,000
Current portion of capital leases ...................................... 1,871,000 561,000
Current portion of long-term debt ...................................... 6,705,000 7,982,000
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Total current liabilities ................................................ 11,270,000 11,742,000
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Long-term debt, less current portion ..................................... 23,336,000 26,409,000
Capital lease obligations, net of current portion ........................ 3,266,000 982,000
Deferred income tax ...................................................... 851,000 717,000
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Total liabilities ........................................................ 38,723,000 39,850,000
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COMMITMENTS AND CONTINGENCIES
Shareholders' equity:
Common stock ........................................................... -- --
Paid in capital ........................................................ 36,479,000 36,454,000
Shareholder receivable ................................................. (722,000) (457,000)
Accumulated deficit .................................................... (2,920,000) (6,288,000)
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Total shareholders' equity ............................................... 32,837,000 29,709,000
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$ 71,560,000 $ 69,559,000
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