he quarterly results reflect the continued ramp-up of operations at Lumiere Place, offset by temporary weather-related closures of L’Auberge du Lac, Boomtown New Orleans and The Admiral Riverboat Casino. For the third quarter ended September 30, 2007, revenues were us$ 238 million and Consolidated Adjusted EBITDA was us$ 47.1 million.
On a GAAP basis, the company reported a net loss of us$ 11.8 million for the third quarter of 2008. GAAP net income for the 2007 third quarter was us$ 5 million. Results from continuing operations reflect increased depreciation costs in 2008, and significant pre-opening and development costs and non-cash charges related to share-based compensation in both periods.
For the nine months ended September 30, revenues were us$ 786 million and Consolidated Adjusted EBITDA was us$ 114 million compared to revenues of us$ 703 million and Consolidated Adjusted EBITDA of us$ 138 million for the prior-year period.
The 2008 nine-month results reflect continued ramp-up of operations at Lumiere Place and strong performances at L’Auberge du Lac and Boomtown New Orleans, partially offset by the third quarter hurricanes, heightened competition in central and southern Indiana and the June 2007 closure of the Boomtown Reno truck stop. While it is not unusual to have hurricanes in the Gulf region, it is unusual to have two hurricanes strike on two key weekends, one of which was a three-day holiday.
The second hurricane, Hurricane Ike, affected not only the Company’s Louisiana operations and its Texas customer base, but also caused flooding in St. Louis and power outages at Belterra in Indiana. There were no hurricanes that materially affected the company’s casinos in 2006 or 2007. On a GAAP basis, net loss for the first nine months of 2008 was us$ 24.9 million versus net income of us$ 17.8 million for the first nine months of 2007.
"We were pleased with the overall performance of our properties in the third quarter despite the hurricane-related disruptions," said Daniel R. Lee, Pinnacle’s Chairman and CEO. "Our operations remain generally solid despite the economy and credit markets. In particular, results at our Louisiana properties were strong in July and August of 2008 and seem to be doing reasonably well to date in the fourth quarter. Lumiere Place also continues to ramp up its operations, improving its results sequentially while increasing the property’s brand awareness in the St. Louis area."
On November 4, 2008, Missouri voters approved Proposition A, the Schools First Initiative, a ballot referendum designed to protect economic benefits and thousands of jobs created by Missouri casinos, as well as to increase funding for Missouri schools by more than us$ 100 million in new net revenue each year.
Proposition A allows for the removal of certain betting restrictions, places a limit on the number of gaming licenses available in the state and increases the tax on casino revenues from 20 percent to 21 %. Pinnacle believes that the approval will be beneficial to the company, as it will allow Lumiere Place to expand its marketing from a local customers’ complex to a regional entertainment destination.
The Lumiere Place entertainment complex currently features two casinos (Lumiere Place and The Admiral Riverboat Casino); the Pinnacle-owned 200-guestroom Four Seasons Hotel St. Louis; the 294-suite HoteLumiere; approximately 2,043 sqm of meeting and convention space; several restaurants and retail outlets; and a luxury spa.
At River City, Pinnacle’s casino project in south St. Louis County, the company has completed the project footings, foundations and pile caps, and steel erection for the complex has commenced.
In August 2008, Pinnacle signed a guaranteed maximum price contract with Yates/Paric, a joint venture, for the hard cost aspects of the construction of River City, constituting approximately 40% of the us$ 375 million project budget. W.G. Yates & Sons Construction Company was part of the team that built Borgata in Atlantic City and Beau Rivage in Biloxi, among other casino projects.
In September 2008, as a result of the turmoil in the financial markets, Pinnacle withdrew its application to be selected as a lottery gaming facility manager for the Northeast Kansas Gaming Zone. In connection with the company’s withdrawal, Pinnacle received a refund of its us$ 25 million deposit from the Kansas Lottery Commission. The move allows the company to focus on its development opportunities in Missouri, Louisiana and elsewhere.
In October 2008, the Louisiana Gaming Control Board approved Pinnacle’s architectural blueprints for the company’s gaming entertainment complex to be built on more than 550 acres the firm owns in Baton Rouge, Louisiana.