Driven primarily by Dover Downs’ acquisition

Twin River reports 17 percent rise in Q4 revenue

Dover Downs was acquired in the first quarter of 2019.
2020-03-05
Reading time 2:46 min
In the fourth quarter, the Rhode Island-based company’s sales were up 17% to $130.4 m ($111.4 m in 2018), with full-year revenue growing 19.7% to $523.6 m ($437.5). The recently acquired Dover Downs Hotel & Casino continued to exceed expectations adding $27.6 m of sales to its performance.

Twin River Worldwide Holdings reported Tuesday its full financial results of operations for the fourth quarter and year ended December 31, 2019.

"I am very pleased with the results of the fourth quarter which reflect the continued stabilization in the New England market following the entrance of new competitors and strong performance across our broader portfolio. We expect this momentum to continue into 2020 which is reflected in our full year 2020 guidance," had said George Papanier, President and CEO of the firm in the preliminary results which were published in February and were subsequently confirmed in the official report.

The Q4 increase was principally driven by the effects of the acquisition of Dover Downs Hotel & Casino, which continued to exceed expectations contributing $27.6 million of revenue to the company's results.

New competition in the New England market, and the associated increases in marketing and promotional activity, continued to negatively impact revenue in the fourth quarter at the Company's Twin River Casino Hotel (Lincoln), however, the Company noted that the impacts have moderated and revenue has shown signs of stabilization. Tiverton Casino Hotel (Tiverton), which opened in September 2018, continued to demonstrate marked resilience in the face of the new regional competition. Also, overall performance at Hard Rock Hotel & Casino Biloxi (Hard Rock Biloxi) remained strong.

Overall gaming revenue increased $4.7 million, or 5.6%, to $88.5 million, food and beverage revenue increased $7.1 million, or 56.7%, to $19.5 million, and hotel revenue increased $4.5 million, or 78.9%, to $10.2 million, in each case, in the fourth quarter of 2019 compared to the same period in 2018.

Income from operations in the fourth quarter of 2019 decreased $5.7 million, or 16.4%, to $29.0 million compared to $34.7 million for the same period last year. These results were unfavorably impacted by an increase in share-based compensation expense of $9.8 million as $1.0 million of expense was recorded in the fourth quarter of 2019 compared to a benefit of $8.8 million in the prior year, driven by a reduction in the fair value of outstanding liability classified awards as well the timing of grants and the mix of liability classified awards creating expense volatility in 2018, and a decrease in income from operations of $2.2 million in the Rhode Island segment primarily due to the reduction in revenue as a result of new competition in the market noted above, partially offset by cost-efficiency measures, particularly in Lincoln.

Partially offsetting these increases in operating expenses was income from operations from Dover Downs, which was acquired in the first quarter of 2019, of $3.4 million, a reduction in acquisition, integration and restructuring expense of $1.4 million year-over-year and a gain related to insurance recovery proceeds received for a damaged roof at the Company's Arapahoe Park for $1.2 million recorded in the fourth quarter of 2019.

Interest expense for the fourth quarter of 2019 increased $4.6 million to $11.4 million compared to the same period last year, as, on May 10, 2019, the Company extended its balance sheet by entering into a new credit facility and issuing $400 million aggregate principal amount of senior notes.

Net income decreased $8.8 million, or 39.7%, to $13.4 million for the fourth quarter of 2019 compared to the same period last year. Adjusted EBITDA for the fourth quarter of 2019 was $40.2 million, an increase of $3.2 million, or 8.7%, from $37.0 million in the same period in 2018.

Diluted EPS for the fourth quarter was $0.40 per share compared to $0.63 in the same period last year. The decrease in diluted EPS was a result of the above-described factors. The Company's repurchase of shares of its common stock as described below also meaningfully impacted the reported earnings per share. Adjusted EPS was $0.42 for the fourth quarter of 2019 compared to $0.78 for the fourth quarter of 2018.

See the full report here.

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