Bally's Corp 8-K, filed Mar 16, 2021

Bally's Corp (BALY)

8-K 2021-03-16 For: 2021-03-16

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Added on April 11, 2026

About this 8-K

Bally's Corp filed this 8-K on March 16, 2021.

Items reported

Item 9.01: Financial statements and exhibits

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Delaware	001-38850	20-0904604
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)


100 Westminster Street
Providence	RI	02903
(Address of Principal Executive Offices and Zip Code)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	BALY	New York Stock Exchange


Exhibit No.						Description
23.1						Consent of Ernst & Young LLP, dated March 16 , 2021
23.2						Consent of Deloitte & Touche LLP, dated March 16, 2021
99.1						Audited Financial Statements of MontBleu as of and for the year ended December 31, 2020 and the notes related thereto
99.2						Audited Financial Statements of MontBleu as of and for the year ended December 31, 20 19 and the notes related thereto
99.3						Unaudited Pro Forma Combined Balance Sheet of Bally's Corporation as of December 31, 2020 and Unaudited Pro Forma Combined Statements of Income of Bally's Corporation for the year ended December 31, 2020, in each case giving pro forma effect to the Company’s acquisition of all the outstanding equity securities of MontBleu and the notes related thereto
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).


			BALLY'S CORPORATION
			By:			/s/ Stephen H. Capp
			Name:			Stephen H. Capp
			Title:			Executive Vice President and Chief Financial Officer


			Page
Independent Auditors' Report			3
Consolidated Balance Sheet			4
Consolidated Statement of Operations			5
Consolidated Statement of Net Parent Investment			6
Consolidated Statement of Cash Flows			7
Notes to Consolidated Financial Statements			8


(In thousands)	As of December 31, 2020
Assets
Current assets
Cash and cash equivalents	$	2,494
Account receivables, net	1,370
Inventories	537
Prepayments and other current assets	1,271
Total current assets	5,672
Property and equipment, net	56,259
Goodwill	5
Intangible assets	4,368
Deferred charges and other assets	41,644
Total assets	$	107,948

Liabilities and Net Parent Investment
Current liabilities
Accounts payable	$	661
Accrued expenses and other current liabilities	2,813
Total current liabilities	3,474
Deferred credits and other liabilities	66,226
Total liabilities	69,700
Commitments and contingencies (Note 7)
Net parent investment	38,248
Total liabilities and net parent investment	$	107,948


(In thousands)	Year Ended December 31, 2020
Revenues
Casino	$	12,040
Food and beverage	6,008
Hotel	11,364
Other	2,043
Net revenues	31,455
Operating expenses
Direct
Casino	6,023
Food and beverage	4,270
Hotel	2,698
Other	828
General and administrative	14,893
Depreciation and amortization	4,736
Total operating expenses	33,448
Net loss	$	(1,993)


(In thousands)
Balance as of January 1, 2020	$	40,701
Net loss	(1,993)
Distributions to parent, net	(460)
Balance as of December 31, 2020	$	38,248


(In thousands)	Year Ended December 31, 2020
Cash flows from operating activities
Net loss	$	(1,993)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	4,736
Non-cash lease amortization	(219)
Change in current assets and liabilities:
Account receivables	526
Inventories	86
Prepayments, and other current assets	(158)
Accounts payable	(457)
Accrued expenses and other liabilities	(1,970)
Cash flows provided by operating activities	551
Cash flows from investing activities
Purchase of property and equipment	(682)
Cash flows used in investing activities	(682)
Cash flows from financing activities
Net payments to parent	(460)
Cash flows used in financing activities	(460)
Net decrease in cash and cash equivalents	(591)
Cash and cash equivalents, beginning of period	3,085
Cash and cash equivalents, end of period	$	2,494


Leases recorded on the balance sheet consist of the following (in thousands):


Weighted Average Remaining Lease Term
Operating Leases			33.46 years
Weighted Average Discount Rate
Operating Leases			7.10 %


Lease expense:
Operating lease expense	$	4,480
Short-term and variable lease expense	857
Total lease expense	$	5,337


Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5,228


Year ending December 31,
2021	$	5,209
2022	5,189
2023	5,186
2024	5,183
2025	5,180
Thereafter	145,051
Total future minimum lease payments	$	170,998
Less: amount representing interest	(104,658)
Present value of future minimum lease payments	$	66,340
Less: current lease obligations	(550)
Long-term lease obligations	$	65,790


Las Vegas, Nevada
March 16, 2021


Buildings and improvements			3 to 40 years
Land improvements			12 to 40 years
Furniture, fixtures and equipment			2 to 15 years


	As of December 31, 2020		Estimated Useful Life
Goodwill	$	5	Indefinite

Gaming licenses	568		Indefinite
Trademarks	3,600		Indefinite
Customer relationships	800		3 years
Subtotal	$	4,968
Accumulated amortization	(600)
Total gaming licenses and other intangible assets, net	$	4,368


	December 31, 2020
Payroll and other compensation	$	693
Accrued taxes	333
Self-insurance	97
Outstanding chip and token liability	436
Advance deposits	36
Operating lease liability	550
Other accruals	668
Total accrued expenses and other current liabilities	$	2,813


	As of December 31, 2020
Land	$	1,027
Buildings and improvements	50,970
Furniture, fixtures, and equipment	13,824
Construction in progress	371
Total property and equipment	66,192
Less: accumulated depreciation	(9,933)
Total property and equipment, net	$	56,259


Depreciation Expense
(In thousands)	Year Ended December 31, 2020
Depreciation expense	$	4,469


	Year Ending December 31,
	2021
Estimated annual amortization expense	$	200


			Page
Report of Independent Auditors			3
Consolidated Balance Sheet			4
Consolidated Statement of Operations			5
Consolidated Statement of Net Parent Investment			6
Consolidated Statement of Cash Flows			7
Notes to Consolidated Financial Statements			8


(In thousands)	As of December 31, 2019
Assets
Current assets
Cash and cash equivalents	$	3,085
Account receivables, net	1,896
Inventories	622
Prepayments and other current assets	1,114
Total current assets	6,717
Property and equipment, net	60,032
Goodwill	5
Intangible assets	4,635
Deferred charges and other assets	41,424
Total assets	$	112,813

Liabilities and Net Parent Investment
Current liabilities
Accounts payable	$	1,104
Accrued expenses and other current liabilities	4,670
Total current liabilities	5,774
Deferred credits and other liabilities	66,338
Total liabilities	72,112
Commitments and contingencies (Note 7)
Net parent investment	40,701
Total liabilities and net parent investment	$	112,813


(In thousands)	Year Ended December 31, 2019
Revenues
Casino	$	12,083
Food and beverage	12,185
Hotel	14,711
Other	4,120
Net revenues	43,099
Operating expenses
Direct
Casino	7,968
Food and beverage	7,879
Hotel	3,412
Other	2,047
General and administrative	15,800
Depreciation and amortization	4,705
Total operating expenses	41,811
Operating income	1,288
Interest income, net	3
Net income	$	1,291


(In thousands)
Balance as of January 1, 2019	$	42,550
Cumulative change in accounting principle	(1,477)
Net income	1,291
Distributions to parent, net	(1,663)
Balance as of December 31, 2019	$	40,701


Weighted Average Remaining Lease Term
Operating Leases			34.46 years
Weighted Average Discount Rate
Operating Leases(1)			7.10 %


Lease expense:
Operating lease expense	$	4,499
Short-term and variable lease expense	971
Total lease expense	$	5,470


Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5,248


Year ending December 31,
2020	$	5,287
2021	5,209
2022	5,189
2023	5,186
2024	5,183
Thereafter	150,232
Total future minimum lease payments	176,286
Less: amount representing interest	(109,417)
Present value of future minimum lease payments	66,869
Less: current lease obligations	(531)
Long-term lease obligations	$	66,338


	As of December 31, 2019		Estimated Useful Life
Goodwill	$	5	Indefinite

Gaming licenses	568		Indefinite
Trademarks	3,600		Indefinite
Customer relationships	800		3 years
Subtotal	4,968
Accumulated amortization	(333)
Total gaming licenses and other intangible assets, net	$	4,635


	Years Ending December 31,
	2020		2021
Estimated annual amortization expense	$	267	$	200


	December 31, 2019
Payroll and other compensation	$	1,225
Accrued taxes	405
Self-insurance	217
Outstanding chip and token liability	1,366
Advance deposits	69
Operating lease liability	531
Other accruals	857
Total accrued expenses and other current liabilities	$	4,670


(in thousands)	Bally's		MontBleu		Transaction Accounting Adjustments		Note 3	Pro Forma Combined
Assets
Cash and cash equivalents	$	123,445	$	2,494	$	—		$	125,939
Restricted cash	3,110		—		—			3,110
Accounts receivable, net	14,798		1,370		—			16,168
Inventory	9,296		537		—			9,833
Tax receivable	84,483		—		—			84,483
Prepaid expenses and other assets	53,823		1,271		—			55,094
Total current assets	288,955		5,672		—			294,627
Property and equipment, net	749,029		56,259		(49,345)		(a)	755,943
Right of use assets, net	36,112		—		16,171		(a)	93,919
					41,636		(b)
Goodwill	186,979		5		(5)		(a)	186,979
Intangible assets, net	663,395		4,368		4,532		(a)	672,295
Other assets	5,385		41,644		(41,636)		(b)	5,393
Total assets	$	1,929,855	$	107,948	$	(28,647)		$	2,009,156

Liabilities and Shareholders' Equity								—
Current portion of long-term debt	$	5,750	$	—	$	—		$	5,750
Current portion of lease obligations	1,520		—		1,877		(a)	3,947
					550		(b)
Accounts payable	15,869		661		—			16,530
Accrued and other current liabilities	120,055		2,813		(550)		(b)	137,318
					15,000		(c)
Total current liabilities	143,194		3,474		16,877			163,545
Lease obligations, net of current portion	62,025		—		(14,051)		(a)	113,764
					65,790		(b)
Long-term debt, net of current portion	1,094,105		—		—			1,094,105
Pension benefit obligations	9,215		—		—			9,215
Deferred tax liability	36,983		—		1,675		(a)	38,658
Naming rights liabilities	243,965		—		—			243,965
Deferred credits and other liabilities	—		66,226		(66,226)		(b)	—
Other long-term liabilities	13,770		—		434		(b)	14,204
Total liabilities	1,603,257		69,700		4,499			1,677,456

Commitments and contingencies	—		—		—

Stockholders' equity:
Common stock	307		—		—			307
Additional paid-in-capital	294,643		—		—			294,643
Treasury stock	—		—		—			—
Retained earnings	34,792		38,248		(33,146)		(d)	39,894
Accumulated other comprehensive loss	(3,144)		—		—			(3,144)
Total shareholders' equity	326,598		38,248		(33,146)			331,700
Total liabilities and shareholders' equity	$	1,929,855	$	107,948	$	(28,647)		$	2,009,156


	Bally's		Acquired Companies(1)		Mont Bleu		Transaction Accounting Adjustments		Note	Pro Forma Combined
Revenues	$	372,792	$	92,893	$	31,455	$	—		$	497,140

Operating costs and expenses:
Gaming, racing, hotel and food and beverage, retail, entertainment and other	138,669		45,467		13,819		(2,375)		(e)	195,580
Marketing and promotions	—		3,392		—		(3,392)		(e)	—
Advertising, general and administrative	176,943		20,833		14,893		5,767		(e)	223,932
							2,920		(f)
							2,576		(g)
							—		(h)
Management fee	—		2,576		—		(2,576)		(g)	—
Goodwill and asset impairment	8,659		—		—		—			8,659
Expansion and pre-opening	921		—		—		—			921

Acquisition, integration and restructuring	13,257		—		—		—		(h)	13,257
Storm related losses, net of insurance recoveries	14,095		—		—		—			14,095
Rebranding	792		—		—		—			792
Depreciation and amortization	37,842		9,817		4,736		125		(i)	49,615
							(2,905)		(j)
Total operating costs and expenses	391,178		82,085		33,448		140			506,851
Income (loss) from operations	(18,386)		10,808		(1,993)		(140)			(9,711)
Other income (expense):
Interest income	612		—		—		—			612
Interest expense, net of amounts capitalized	(63,248)		(6,167)		—		6,167		(k)	(69,913)
							(6,665)		(l)
Change in value of naming rights liabilities	(57,660)		—		—		—			(57,660)
Gain on bargain purchases	63,871		—		—		5,102		(m)	68,973
Total other income (expense)	(56,425)		(6,167)		—		4,604			(57,988)
Loss (income) before provision for income taxes	(74,811)		4,641		(1,993)		4,464			(67,699)
(Benefit) provision for income taxes	(69,324)		322		—		6,269		(n)	(62,733)
Net (loss) income	$	(5,487)	$	4,319	$	(1,993)	$	(1,805)		$	(4,966)

Net loss per common share:
Basic	$	(0.18)								$	(0.16)
Diluted	$	(0.18)								$	(0.16)
Weighted average common shares outstanding:
Basic	31,315									31,315
Diluted	31,315									31,315


	Debit/(Credit)
Cash	$	2,494
Accounts receivable	1,370
Inventory	537
Prepaid expenses and other assets	1,271
Property and equipment	6,914
Right of use asset	57,807
Intangible assets	8,900
Other assets	8
Accounts payable	(661)
Accrued and other current liabilities	(2,263)
Lease obligations	(54,166)
Deferred income tax liabilities	(1,675)
Other long-term liabilities	(434)
Net assets acquired	20,102
Bargain purchase gain	(5,102)
Total purchase price	$	15,000


	Preliminary as of July 1, 2020
Cash	$	4,362
Accounts receivable	582
Inventory	164
Prepaid expenses and other assets	686
Property and equipment	60,865
Right of use asset	10,315
Intangible assets	138,160

Other assets	117
Goodwill	53,896
Accounts payable	(614)
Accrued and other current liabilities	(3,912)
Lease obligations	(34,452)

Other long-term liabilities	(306)
Total purchase price	$	229,863


	Preliminary as of December 23, 2020
Cash	$	4,980
Accounts receivable	1,936
Inventory	495
Prepaid expenses and other assets	245
Property and equipment	125,822
Right of use asset	9,260
Intangible assets	58,140
Other assets	403
Accounts payable	(931)
Accrued and other current liabilities	(5,207)
Lease obligations	(14,540)
Deferred income tax liabilities	(11,457)
Other long-term liabilities	(680)
Net assets acquired	168,466
Bargain purchase gain	(31,276)
Total purchase price	$	137,190


Total consideration	$	15,000
Net parent investment	(38,248)
Write-down/(write-up) of assets:
Property and equipment, net	49,344
Right of use assets	(16,171)
Intangible assets	(4,533)
Historical goodwill	5
(Write-down)/write-up of liabilities:
Lease obligations	(12,174)
Deferred income taxes	1,675
Bargain purchase gain	$	(5,102)