International edition
June 15, 2021

Lumiere Place posts significantly increased cash flows

Pinnacle Entertainment reports fourth quarter and full-year 2009 results

(US).- Pinnacle Entertainment reported financial results for the fourth quarter and full year ended last December 31. Revenues in the fourth quarter of 2009 were us$ 245 million, a 5.4% decline from the prior-year period's us$ 259 million.

T

he firm reviewed certain assets on our balance sheet and recorded us$ 207 million of non-cash write-downs in the carrying value of various assets. We are evaluating some of those assets for the possibility of future disposal. These write-downs, as well as us$ 5 million in severance costs related to the departure of the company's former CEO and other corporate staff, are reflected in the firm's net loss of us$ 242 million for the 2009 fourth quarter. For the 2008 fourth quarter, the net loss was us$ 298 million, including us$ 313 million of non-cash write-downs.

For the year, revenue was virtually unchanged from last year at us$ 1 billion. Net loss for the year was us$ 258 million, including us$ 207 million in non-cash write-downs, as compared to us$ 323 million in 2008, including us$ 318 million in non-cash write-downs.

Consolidated Adjusted EBITDA for the 2009 fourth quarter declined 51% to us$ 22.5 million compared to a very strong 2008 fourth quarter of us$ 45.6 million. The 2009 fourth quarter included a weaker performance at two of the company's Louisiana properties and its Indiana property, as well as the aforementioned severance costs, partially offset by a strong showing by our newest property in St. Louis.

For the year, Consolidated Adjusted EBITDA increased 5.2% to us$ 168 million in 2009 from the prior year's us$ 160 million. Strong performances by Lumiere Place and Boomtown Bossier City were offset by declines, mainly in the fourth quarter, by L'Auberge du Lac and Boomtown New Orleans.

"The fourth quarter was a tough one for us, and we're disappointed," said John Giovenco, Pinnacle Entertainment's interim CEO. "While the first half of the year was solid, the continuing deterioration of the economy resulted in less visitation and lower play per customer. We started to feel the economic downturn in late summer and we increased our marketing efforts. As a result, we maintained or increased market share in many of our larger markets, but our margins declined.

"In spite of these difficult conditions, we were particularly pleased to see Lumiere Place in St. Louis perform so well -a 19 % increase in revenue and a 66 % increase in Adjusted EBITDA in the fourth quarter. This heightens our confidence that the scheduled opening of River City in south St. Louis County will be successful. We plan to open River City on March 4, 2010, subject to approval by the Missouri Gaming Commission.

"As we enter 2010, we are focused on our commitment to increasing shareholder value," Giovenco continued. "We're concentrating on operating efficiency and, in particular, effective marketing. We're evaluating our underperforming and non-strategic assets; reducing corporate overhead costs; taking a disciplined approach to capital spending; and developing Sugarcane Bay and Baton Rouge in Louisiana.

"To achieve these goals, we redesigned both our Sugarcane Bay and Baton Rouge projects, resulting in a reduction of more than us$ 100 million in Sugarcane Bay's cash construction costs; restructured corporate and property marketing to result in a significant net reduction in headcount; subsequent to year-end decided to put our Atlantic City assets up for sale; listed the company airplane for sale; hired two highly experienced general managers for Boomtown New Orleans and Lumiere Place; moved to consolidate our three Las Vegas offices into one; reduced corporate overhead; and plan to institute a new compensation program that rewards executives for increasing long-term cash flow and EBITDA. We believe these actions will improve operating results.

"Separately, the board has engaged the international recruiting firm Heidrick & Struggles to help conduct the search for a new executive to succeed Pinnacle's former chief executive officer, who left the company in the fourth quarter of 2009. The search is well underway, and we will announce a resolution at the appropriate time," Giovenco said.

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