8-K
Bally's Corp (BALY)
UNITED STATES
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): August 11, 2020
________________________
Twin River Worldwide Holdings, Inc.
(Exact name of registrant as specified in its charter)
| 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) |
________________________
(401) 475-8474
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12 (b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.01 par value | TRWH | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 2.02 Results of Operations and Financial Condition.
On August 11, 2020, Twin River Worldwide Holdings, Inc. (the “Company”), issued a press release to report its financial results for the second quarter ended June 30, 2020. The press release is furnished as Exhibit 99.1 hereto.
The information contained in the Current Report on Form 8-K, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Twin River Worldwide Holdings, Inc. dated August 11, 2020 |
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.
| TWIN RIVER WORLDWIDE HOLDINGS, INC. | |
|---|---|
| By: | /s/ Stephen H. Capp |
| Name: | Stephen H. Capp |
| Title: | Executive Vice President and <br>Chief Financial Officer |
Date: August 11, 2020
Document
TWIN RIVER ANNOUNCES SECOND QUARTER 2020 RESULTS
ALL PROPERTIES RESUMED OPERATIONS BY MID-JUNE
Providence, Rhode Island - August 11, 2020 - Twin River Worldwide Holdings, Inc. (NYSE: TRWH) (the “Company” or “Twin River”) today reported financial results for the second quarter ended June 30, 2020.
Second Quarter 2020 and Recent Highlights
•June Adjusted EBITDA was positive in all segments, with the exception of Rhode Island, where June represented a pre-opening period
•Strong demand and significant margin improvement at properties authorized to operate with closer-to-normal capacity and amenities
•Strong balance sheet positions the Company to pursue strategic growth opportunities
George Papanier, President and Chief Executive Officer, said "We were thrilled to have welcomed back our valued team members and loyal customers at all of our properties to safe and secure environments that meet or exceed CDC safety guidelines. Since reopening, where we have been permitted to operate under fewer capacity restrictions with more amenities, we are seeing strong demand. On a comparable basis, Hard Rock Biloxi and Dover Downs achieved strong Adjusted EBITDA performance and significant margin improvement while complying with state-regulated reductions in gaming capacity. These positive margin trends are continuing into July, giving us confidence that we can sustain a level of the increased operational efficiencies."
Papanier continued, "I am also excited to welcome our newest properties in Kansas City, Missouri and Vicksburg, Mississippi which we have rebranded Casino KC and Casino Vicksburg, respectively. Both of these properties experienced robust demand and have generated strong positive cash flow following their reopening and our subsequent acquisition. The Casino KC and Casino Vicksburg properties are a great fit for our portfolio and significantly expand our geographic footprint with assets in attractive markets. We see a lot to build on and look forward to working with the local teams to realize the strategic benefits of this transaction."
Second Quarter 2020 Results
($ in thousands, except for percentages)
| Two Months Ended | Month Ended | Three Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| May 31, 2020 | May 31, 2019 | Change | June 30, 2020 | June 30, 2019 | Change | June 30, 2020 | June 30, 2019 | Change | |||||||||||
| Revenue | $ | 6,551 | $ | 96,714 | (93.2) | % | $ | 22,373 | $ | 46,504 | (51.9) | % | $ | 28,924 | $ | 143,218 | (79.8) | % | |
| Operating (loss) income | (23,701) | 24,029 | (198.6) | % | 2,738 | 9,817 | (72.1) | % | (20,963) | 33,846 | (161.9) | % | |||||||
| Net (loss) income | (21,392) | 11,862 | (280.3) | % | (2,163) | 5,318 | (140.7) | % | (23,555) | 17,180 | (237.1) | % | |||||||
| Adjusted EBITDA^(1)^ | (14,813) | 33,752 | (143.9) | % | 4,090 | 13,705 | (70.2) | % | (10,723) | 47,457 | (122.6) | % | |||||||
| (1) Refer to tables in this press release for a reconciliation of this non-GAAP financial measures to the most directly comparable measure calculated in accordance with GAAP. |
As reflected above, results for the second quarter of 2020 were significantly impacted by the mandated shut-down of operations in mid-March as a result of COVID-19. Revenue for the second quarter of 2020 decreased 79.8% to $28.9 million from $143.2 million in the second quarter of 2019. Net loss for the second quarter of 2020 was $23.6 million, a decrease of $40.7 million, or 237.1%, from net income of $17.2 million in the second quarter last year. Adjusted EBITDA for the second quarter of 2020 was negative $10.7 million, a decrease of $58.2 million, or 122.6%, from positive Adjusted EBITDA of $47.5 million in the second quarter 2019.
Reopening Update
During the period from March 14^th^ through March 16^th^, all nine of the Company's casino properties nationwide (including Casino KC and Casino Vicksburg, which the Company acquired on July 1, 2020) were closed under state and local orders aimed at mitigating the spread of COVID-19. Operations at these properties resumed on the following dates:
May 21: Hard Rock Hotel & Casino Biloxi and Casino Vicksburg
June 1: Dover Downs Casino Hotel and Casino KC
June 8: Twin River Casino Hotel and Tiverton Casino Hotel (both initially by invitation only)
June 17: Black Hawk Casinos (Mardi Gras, Golden Gates and Golden Gulch)
The following comparisons reflect operating trends for the month of June, as compared to the corresponding period of the prior year. Once opened, all properties operated under varying degrees of reduced capacity in compliance with local and state restrictions.
In segments where the Company was able to operate at closer to normal capacity and with more amenities available for most of June, notably Biloxi and Delaware, it experienced strong demand and significantly improved margins compared to June 2019. In Biloxi, overall revenue was up 2% from June 2019, while Adjusted EBITDA almost doubled from $2.9 million in June 2019 to $5.7 million in June 2020, representing an increase in Adjusted EBITDA margins of over 2,400 basis points. Meanwhile, at Dover Downs, overall revenues for June 2020 were down 31.6% while Adjusted EBITDA for the month was relatively flat year-over-year at $2.1 million, resulting in an increase in Adjusted EBITDA margin of approximately 1,150 basis points.
In Rhode Island, June 2020 primarily represented a pre-opening period during which both of the Company's properties were open on an invitation only, very limited capacity basis, in accordance with local restrictions. The result was a decrease in June revenue year-over-year that was down meaningfully, however improved margin performance mitigated the full impact of the revenue decline on the Adjusted EBITDA loss recognized for the month.
Since opening to the general public on June 30^th^, albeit with continued capacity restrictions and limited amenities, the Company has seen revenue in Rhode Island begin to rebound. July revenue figures for the segment are expected to be up approximately 240% sequentially from June 2020 on a preliminary basis, and are approximately 60% of the revenue experienced in the same period in 2019. Preliminary Adjusted EBITDA for the segment was positive in July.
While the Company continued to operate at reduced capacity at all its properties in July, the two new facilities acquired on July 1st are contributing positively and though preliminary results, on a combined basis, reflect an overall decrease in revenues year over year for the month in the range of approximately 7% to 10%, year-over-year Adjusted EBITDA is up for the month.
Other Financial Information
Interest expense, net of interest income, for the second quarter of 2020 increased $5.9 million to $15.1 million compared to the second quarter last year. This increase was a result of timing and debt obligations outstanding in each respective period. The prior year only included a partial quarter of interest related to the credit facility and $400 million aggregate principal amount of senior notes entered into on May 10, 2019, as compared to the current year which also included interest on the $250 million revolver which was fully drawn on March 16, 2020 and then subsequently repaid when the Company increased its term loan by $275 million on May 11, 2020.
Twin River recorded a tax benefit of $12.5 million in the second quarter of 2020 as compared to tax expense of $6.1 million in the prior comparable year period. The change year-over-year was driven by the reduction in pre-tax book income due to the mandated shut-down of our operations in response to the COVID-19 pandemic for various periods between mid-March of 2020 and June 17, 2020, when our last remaining closed facility was permitted to re-open.
As of June 30, 2020, the Company had cash on hand of $331.1 million and an unfunded $250 million revolver, for a total liquidity of over $580 million. On a proforma basis for the approximately $230 million the Company paid to acquire Casino KC and Casino Vicksburg on July 1, 2020, the Company had total liquidity of approximately $350 million, including the unfunded revolver. Outstanding indebtedness at the end of the second quarter of 2020, before the impact of $18.1 million of unamortized deferred financing fees and $10.0 million of unamortized original issue discount, totaled $972.0 million, inclusive of the $275 million of new debt added with the term loan.
Reconciliation of GAAP Measures to Non-GAAP Measures
To supplement the financial information presented on a generally accepted accounting principles (“GAAP”) basis, the Company has included in this earnings release non-GAAP financial measures for Adjusted EBITDA, Adjusted EBITDA margin, gross gaming revenue and adjusted earnings per diluted share, which exclude certain items described below. The Company believes these measures represent important measures of financial performance that provide useful information that is helpful in understanding the Company’s ongoing operating results. The reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below.
"Adjusted EBITDA" is earnings, or loss, for the Company, or where noted the Company’s reporting segments, before, in each case, interest expense, net of interest income, (benefit) provision for income taxes, depreciation and amortization, non-operating income, acquisition, integration and restructuring expense, goodwill and asset impairment, share-based compensation, professional and advisory fees associated with capital return program, CARES Act credit, credit agreement amendment expenses, gain on insurance recoveries, and certain other gains or losses as well as, when presented for the Company’s reporting segments, an adjustment related to the allocation of corporate cost among segments. Adjusted EBITDA margin is measured as Adjusted EBITDA as a percentage of revenue.
"Gross gaming revenue" represents total gaming revenue adjusted for the State of Rhode Island's and the State of Delaware's shares of net terminal income, table games revenue and other gaming revenue, and is being presented by the Company to reflect the unique structure of the Company’s operations in those states where the state’s share of the Company’s revenues is retained at the gross revenue level rather than through taxes. Management believes that the presentation of gaming revenue on a gross basis allows for comparisons to gross gaming win data provided throughout the gaming industry.
“Adjusted EPS” represents net income, or loss, per diluted share before acquisition, integration and restructuring expense, credit agreement amendment expenses, professional and advisory fees associated with capitalization programs, CARES Act credit, gain on insurance recoveries, goodwill and asset impairment charge, and certain other gains or losses.
Management has historically used Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS when evaluating operating performance because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of the Company’s core operating results and as
a means to evaluate period-to-period performance. Management also believes that Adjusted EBITDA is a measure that is widely used for evaluating operating performance of companies in our industry and a principal basis for valuing resort and gaming companies like the Company. Management of the Company believes that while certain items excluded from Adjusted EBITDA and Adjusted EPS may be recurring in nature and should not be disregarded in evaluating the Company’s earnings performance, it is useful to exclude such items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events that may not be comparable between the periods presented or they may not relate specifically to current operating trends or be indicative of future results. Neither Adjusted EBITDA nor Adjusted EPS should be construed as an alternative to GAAP net income or GAAP diluted EPS, respectively, as an indicator of the Company’s performance. In addition, Adjusted EBITDA or Adjusted EPS as used by the Company may not be defined in the same manner as other companies in the Company’s industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies.
Second Quarter Conference Call
The Company’s second quarter 2020 earnings conference call and audio webcast will be held today, Tuesday, August 11, 2020, at 8:00 AM EDT. To access the conference call, please dial (833) 570-1160 (U.S. toll-free) and reference conference ID number 9486692. The webcast of the call will be available to the public, on a listen-only basis, via the Internet at the Investors section of the Company’s website at www.twinriverwwholdings.com. An online archive of the webcast will be available on the Company’s website for 120 days. Supplemental materials have also been posted to the Investors section of the website, under Events & Presentations.
About Twin River Worldwide Holdings, Inc.
Twin River Worldwide Holdings, Inc. owns and manages nine casinos, two in Rhode Island, two in Mississippi, one in Delaware, one in Missouri and three casinos as well as a horse racetrack that has 13 authorized OTB licenses in Colorado. Properties include Twin River Casino Hotel (Lincoln, RI), Tiverton Casino Hotel (Tiverton, RI), Hard Rock Hotel & Casino (Biloxi, MS), Casino Vicksburg (formerly Lady Luck Casino Vicksburg) (Vicksburg, MS), Dover Downs Hotel & Casino (Dover, DE), Casino KC (formerly Isle of Capri Casino) (Kansas City, MO), Golden Gates Casino (Black Hawk, CO), Golden Gulch Casino (Black Hawk, CO), Mardi Gras Casino (Black Hawk, CO), and Arapahoe Park racetrack (Aurora, CO). The Company's casinos range in size from 603 slots and 8 electronic table games to properties with over 4,100 slots, approximately 125 table games, and 48 stadium gaming positions, along with hotel and resort amenities. The Company's shares are traded on the New York Stock Exchange under the ticker symbol "TRWH."
| Investor Contact | Media Contact |
|---|---|
| Steve Capp | Liz Cohen |
| Executive Vice President and Chief Financial Officer | Kekst CNC |
| 401-475-8564 | 212-521-4845 |
| InvestorRelations@twinriver.com | Liz.Cohen@kekstcnc.com |
Forward-Looking Statements
This communication contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including future financial and operating results and the Company's plans, objectives, expectations and intentions, legal, economic and regulatory conditions are forward-looking statements. Forward-looking statements are sometimes identified by words like "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target" or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or
more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty surrounding the ongoing COVID-19 pandemic, including uncertainty regarding its extent, duration and impact, the resulting closure of Twin Rivers' properties (all of which have re-opened at some limited level of capacity) and the risk that the ongoing COVID-19 pandemic may require Twin River's properties to close again for an indeterminable period of time; (2) the time it will take Twin River to return its facilities to full capacity and the restrictions applicable to its facilities until then; (3) the costs to comply with any mandated health requirements associated with the virus; (4) customer responses as Twin River's facilities continue to operate under various restrictions including the time it takes customers to return to the facilities and the frequency with which they visit Twin River's facilities; (5) the economic uncertainty and challenges in the economy resulting from the ongoing COVID-19 pandemic, including the resulting reduced levels of discretionary consumer spending; (6) challenges Twin River may face in bringing employees back to work upon re-opening of its facilities; (7) unexpected costs, charges or expenses resulting from the recently completed acquisitions; (8) uncertainty of the expected financial performance of Twin River, including the failure to realize the anticipated benefits of its acquisitions; (9) Twin River's ability to implement its business strategy; (10) evolving legal, regulatory and tax regimes; (11) the effects of competition that exists in the gaming industry; (12) the actions taken to reduce costs and losses as a result of the COVID-19 pandemic, which could negatively impact guest loyalty and our ability to attract and retain employees; (13) risks associated with increased leverage from Twin River's recently completed and proposed acquisitions; (14) the inability or unwillingness of the lenders under our revolving credit facility to fund requests that we may make to borrow amounts under the facility; (15) increased borrowing costs associated with higher levels of borrowing and (16) other risk factors as detailed under Part I. Item 1A. "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission on March 13, 2020 and the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 as filed with the Securities and Exchange Commission on May 14, 2020. The foregoing list of important factors is not exclusive.
Any forward-looking statements speak only as of the date of this communication. Twin River does not undertake any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except share data)
| June 30,<br>2020 | December 31,<br>2019 | |||
|---|---|---|---|---|
| Assets | ||||
| Cash and cash equivalents | $ | 331,083 | $ | 182,581 |
| Restricted cash | 1,647 | 2,921 | ||
| Accounts receivable, net | 11,917 | 23,190 | ||
| Inventory | 8,994 | 7,900 | ||
| Prepaid expenses and other assets | 40,265 | 28,439 | ||
| Total current assets | 393,906 | 245,031 | ||
| Property and equipment, net | 540,797 | 510,436 | ||
| Right of use assets, net | 16,823 | 17,225 | ||
| Goodwill, net | 133,082 | 133,082 | ||
| Intangible assets, net | 109,862 | 110,373 | ||
| Other assets | 5,491 | 5,740 | ||
| Total assets | $ | 1,199,961 | $ | 1,021,887 |
| Liabilities and Shareholders’ Equity | ||||
| Current portion of long-term debt | $ | 5,750 | $ | 3,000 |
| Current portion of lease obligations | 1,046 | 1,014 | ||
| Accounts payable | 8,035 | 14,921 | ||
| Accrued liabilities | 63,843 | 70,849 | ||
| Total current liabilities | 78,674 | 89,784 | ||
| Lease obligations, net of current portion | 15,781 | 16,214 | ||
| Pension benefit obligations | 8,317 | 8,688 | ||
| Deferred tax liability | 10,569 | 13,790 | ||
| Long-term debt, net of current portion | 938,140 | 680,601 | ||
| Other long-term liabilities | 921 | 1,399 | ||
| Total liabilities | 1,052,402 | 810,476 | ||
| Commitments and contingencies | ||||
| Shareholders’ equity: | ||||
| Common stock, par value $0.01; 100,000,000 shares authorized; 30,456,493 and 41,193,018 shares issued as of June 30, 2020 and December 31, 2019, respectively; 30,456,493 and 32,113,328 shares outstanding as of June 30, 2020 and December 31, 2019, respectively. | 304 | 412 | ||
| Additional paid-in-capital | 141,297 | 185,544 | ||
| Treasury stock, at cost, 0 and 9,079,690 shares as of June 30, 2020 and December 31, 2019, respectively. | — | (223,075) | ||
| Retained earnings | 7,846 | 250,418 | ||
| Accumulated other comprehensive loss | (1,888) | (1,888) | ||
| Total shareholders’ equity | 147,559 | 211,411 | ||
| Total liabilities and shareholders’ equity | $ | 1,199,961 | $ | 1,021,887 |
TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Revenue: | ||||||||
| Gaming | $ | 23,767 | $ | 100,234 | $ | 99,603 | $ | 191,102 |
| Racing | 176 | 3,783 | 3,133 | 6,723 | ||||
| Hotel | 2,115 | 11,390 | 9,761 | 17,695 | ||||
| Food and beverage | 1,670 | 18,801 | 16,986 | 32,312 | ||||
| Other | 1,196 | 9,010 | 8,589 | 16,017 | ||||
| Total revenue | 28,924 | 143,218 | 138,072 | 263,849 | ||||
| Operating costs and expenses: | ||||||||
| Gaming | 9,871 | 26,078 | 33,084 | 47,154 | ||||
| Racing | 789 | 2,833 | 3,196 | 5,024 | ||||
| Hotel | 1,152 | 4,183 | 4,444 | 6,897 | ||||
| Food and beverage | 2,659 | 15,634 | 15,935 | 26,741 | ||||
| Retail, entertainment and other | 123 | 2,125 | 2,053 | 3,451 | ||||
| Advertising, general and administrative | 23,989 | 48,047 | 73,598 | 86,310 | ||||
| Goodwill and asset impairment (adjustment) | (154) | — | 8,554 | — | ||||
| Acquisition, integration and restructuring expense | 2,458 | 2,239 | 4,244 | 9,117 | ||||
| Gain on insurance recoveries | (143) | — | (1,026) | — | ||||
| Depreciation and amortization | 9,143 | 8,233 | 18,122 | 15,002 | ||||
| Total operating costs and expenses | 49,887 | 109,372 | 162,204 | 199,696 | ||||
| (Loss) income from operations | (20,963) | 33,846 | (24,132) | 64,153 | ||||
| Other income (expense): | ||||||||
| Interest income | 112 | 754 | 255 | 767 | ||||
| Interest expense, net of amounts capitalized | (15,222) | (9,966) | (26,738) | (17,017) | ||||
| Loss on extinguishment and modification of debt | — | (1,491) | — | (1,491) | ||||
| Other, net | — | 182 | — | 182 | ||||
| Total other expense, net | (15,110) | (10,521) | (26,483) | (17,559) | ||||
| (Loss) income before provision for income taxes | (36,073) | 23,325 | (50,615) | 46,594 | ||||
| (Benefit) provision for income taxes | (12,518) | 6,145 | (18,182) | 11,818 | ||||
| Net (loss) income | $ | (23,555) | $ | 17,180 | $ | (32,433) | $ | 34,776 |
| Net (loss) income per share, basic | $ | (0.77) | $ | 0.42 | $ | (1.05) | $ | 0.88 |
| Weighted average common shares outstanding, basic | 30,452 | 41,137 | 31,011 | 39,701 | ||||
| Net (loss) income per share, diluted | $ | (0.77) | $ | 0.42 | $ | (1.04) | $ | 0.87 |
| Weighted average common shares outstanding, diluted | 30,549 | 41,261 | 31,104 | 39,822 |
TWIN RIVER WORLDWIDE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In thousands)
| Six Months Ended June 30, | ||||
|---|---|---|---|---|
| 2020 | 2019 | |||
| Cash flows from operating activities: | ||||
| Net (loss) income | $ | (32,433) | $ | 34,776 |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
| Depreciation of property and equipment | 14,951 | 12,113 | ||
| Amortization of intangible assets | 3,171 | 2,889 | ||
| Amortization of operating lease right of use assets | 517 | 722 | ||
| Share-based compensation - equity awards | 7,669 | 1,779 | ||
| Amortization of deferred financing costs and discounts on debt | 1,974 | 1,428 | ||
| Loss on debt extinguishment and modification of debt | — | 1,491 | ||
| Bad debt expense | 813 | 58 | ||
| Net pension and other postretirement benefit income | — | (39) | ||
| Deferred income taxes | (3,221) | — | ||
| Gain on disposal of property and equipment | — | (8) | ||
| Goodwill and asset impairment | 8,554 | — | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | 10,402 | 708 | ||
| Inventory | (955) | 122 | ||
| Prepaid expenses and other assets | (10,978) | (944) | ||
| Accounts payable | (7,389) | (300) | ||
| Accrued liabilities | (9,456) | 1,871 | ||
| Net cash (used in) provided by operating activities | (16,381) | 56,666 | ||
| Cash flows from investing activities: | ||||
| Acquisition of Dover Downs Gaming & Entertainment, Inc., net of cash acquired | — | (9,606) | ||
| Acquisition of Black Hawk Casinos, net of cash acquired | (50,451) | — | ||
| Proceeds from sale of property and equipment | — | 7 | ||
| Capital expenditures, excluding Tiverton Casino Hotel and new hotel at Twin River Casino | (5,448) | (13,114) | ||
| Capital expenditures - Tiverton Casino Hotel | — | (1,824) | ||
| Capital expenditures - new hotel at Twin River Casino | — | (3,741) | ||
| Payments associated with licenses | — | (942) | ||
| Net cash used in investing activities | (55,899) | (29,220) | ||
| Cash flows from financing activities: | ||||
| Revolver borrowings | 250,000 | 25,000 | ||
| Revolver repayments | (250,000) | (80,000) | ||
| Term loan proceeds, net of fees of $13,820 and $10,655, respectively | 261,180 | 289,345 | ||
| Term loan repayments | (1,500) | (342,439) | ||
| Senior note proceeds, net of fees of $0 and $6,130, respectively | — | 393,870 | ||
| Payment of financing fees | (1,117) | (3,358) | ||
| Share repurchases | (33,292) | (409) | ||
| Payment of shareholder dividends | (3,199) | — | ||
| Share redemption for tax withholdings - restricted stock | (2,564) | — | ||
| Net cash provided by financing activities | 219,508 | 282,009 | ||
| Net change in cash and cash equivalents and restricted cash | 147,228 | 309,455 | ||
| Cash and cash equivalents and restricted cash, beginning of period | 185,502 | 81,431 | ||
| Cash and cash equivalents and restricted cash, end of period | $ | 332,730 | $ | 390,886 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for interest | $ | 23,402 | $ | 10,960 |
| Cash paid for income taxes, net of refunds | (165) | 8,794 |
TWIN RIVER WORLDWIDE HOLDINGS, INC.
Reconciliation of Net Income and Net Income Margin to
Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except percentages) | 2020 | 2019 | 2020 | 2019 | ||||||||
| Revenue | $ | 28,924 | $ | 143,218 | $ | 138,072 | $ | 263,849 | ||||
| Net (loss) income | $ | (23,555) | $ | 17,180 | $ | (32,433) | $ | 34,776 | ||||
| Interest expense, net of interest income | 15,110 | 9,212 | 26,483 | 16,250 | ||||||||
| (Benefit) provision for income taxes | (12,518) | 6,145 | (18,182) | 11,818 | ||||||||
| Depreciation and amortization | 9,143 | 8,233 | 18,122 | 15,002 | ||||||||
| Non-operating income | — | (182) | — | (182) | ||||||||
| Acquisition, integration and restructuring expense | 2,458 | 2,239 | 4,244 | 9,117 | ||||||||
| Goodwill and asset impairment (adjustment) | (154) | — | 8,554 | — | ||||||||
| Share-based compensation | 2,127 | 1,628 | 7,669 | 1,779 | ||||||||
| Professional and advisory fees associated with capital return program | (1) | 1,703 | (17) | 1,703 | ||||||||
| CARES Act credit ^(1)^ | (2,885) | — | (2,885) | — | ||||||||
| Credit Agreement amendment expenses ^(2)^ | 152 | 1,294 | 391 | 1,629 | ||||||||
| Gain on insurance recoveries ^(3)^ | (143) | — | (1,026) | — | ||||||||
| Other ^(4)^ | (457) | 5 | 418 | (552) | ||||||||
| Adjusted EBITDA | $ | (10,723) | $ | 47,457 | $ | 11,338 | $ | 91,340 | ||||
| Net income margin | (81.44) | % | 12.00 | % | (23.49) | % | 13.18 | % | ||||
| Adjusted EBITDA margin | (37.07) | % | 33.14 | % | 8.21 | % | 34.62 | % |
__________________________________
(1) Amount represents the Employee Retention Credit under the CARES Act which provides the Company with a refundable tax credit of 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
(2) Credit Agreement amendment expenses include costs associated with amendments made to the Company’s Credit Agreement.
(3) Gain related to insurance recovery proceeds received for a damaged roof at the Company’s Arapahoe Park racetrack.
(4) Other includes the following non-recurring items for the applicable periods (i) expenses incurred associated with the Rhode Island State Police investigation into a tenant in the Lincoln property and a former employee of the Company, (ii) a pension audit payment representing an adjustment to a charge for out-of-period unpaid contributions, inclusive of estimated interest and penalties, to one of the Company’s multi-employer pension plans, (iii) expenses incurred associated with the campaign attempting to create an open bid process for the Rhode Island Lottery Contract, (iv) non-routine legal expenses incurred in connection with certain litigation matters (net of insurance reimbursements), and (v) costs incurred in connection with the implementation of a new human resources information system.
TWIN RIVER WORLDWIDE HOLDINGS, INC.
Reconciliation of Net Income to Adjusted EBITDA by Month (unaudited)
(in thousands)
| Two Months Ended | Month Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| May 31, 2020 | May 31, 2019 | June 30, 2020 | June 30, 2019 | |||||
| Revenue | $ | 6,551 | $ | 96,714 | $ | 22,373 | $ | 46,504 |
| Net (loss) income | $ | (21,392) | $ | 11,862 | $ | (2,163) | $ | 5,318 |
| Interest expense, net of interest income | 9,545 | 7,177 | 5,565 | 2,035 | ||||
| (Benefit) provision for income taxes | (11,854) | 4,096 | (664) | 2,049 | ||||
| Depreciation and amortization | 6,108 | 5,502 | 3,035 | 2,731 | ||||
| Non-operating income | — | (143) | — | (39) | ||||
| Acquisition, integration and restructuring expense | 1,955 | 989 | 503 | 1,250 | ||||
| Goodwill and asset impairment (adjustment) | — | — | (154) | — | ||||
| Share-based compensation | 1,284 | 1,404 | 843 | 224 | ||||
| Professional and advisory fees associated with capital return program | (1) | 283 | — | 1,420 | ||||
| CARES Act credit^(1)^ | — | — | (2,885) | — | ||||
| Credit Agreement amendment expenses^(1)^ | 107 | 2,329 | 45 | (1,035) | ||||
| Gain on insurance recoveries ^(1)^ | (68) | — | (75) | — | ||||
| Other ^(1)^ | (497) | 253 | 40 | (248) | ||||
| Adjusted EBITDA | $ | (14,813) | $ | 33,752 | $ | 4,090 | $ | 13,705 |
_______________________________
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.
Reconciliation of Adjusted EBITDA by Segment for
June 2020 Compared to June 2019 (unaudited)
(in thousands)
| Month Ended | ||||
|---|---|---|---|---|
| June 30, 2020 | June 30, 2019 | |||
| Rhode Island | $ | (1,962) | $ | 12,070 |
| Delaware | 2,095 | 2,112 | ||
| Biloxi | 5,719 | 2,869 | ||
| Other | (1,762) | (3,346) | ||
| Total | $ | 4,090 | $ | 13,705 |
TWIN RIVER WORLDWIDE HOLDINGS, INC.
Revenue and Reconciliation of Net Income to
Adjusted EBITDA by Segment (unaudited)
(in thousands)
| Three Months Ended June 30, 2020 | Rhode Island | Delaware | Biloxi | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 3,954 | $ | 6,464 | $ | 17,136 | $ | 1,370 | $ | 28,924 |
| Net (loss) income | $ | (10,031) | $ | (2,357) | $ | 1,658 | $ | (12,825) | $ | (23,555) |
| Interest expense, net of interest income | (20) | 36 | (5) | 15,099 | 15,110 | |||||
| (Benefit) provision for income taxes | (3,548) | (891) | 464 | (8,543) | (12,518) | |||||
| Depreciation and amortization | 4,751 | 1,464 | 2,238 | 690 | 9,143 | |||||
| Acquisition, integration and restructuring expense | — | — | — | 2,458 | 2,458 | |||||
| Goodwill and asset impairment (adjustment) | — | — | — | (154) | (154) | |||||
| Share-based compensation | — | — | — | 2,127 | 2,127 | |||||
| Professional and advisory fees associated with capital return program | — | — | — | (1) | (1) | |||||
| CARES Act credit ^(1)^ | (1,469) | (580) | (486) | (350) | (2,885) | |||||
| Credit Agreement amendment expenses ^(1)^ | — | — | — | 152 | 152 | |||||
| Gain on insurance recoveries ^(1)^ | — | — | — | (143) | (143) | |||||
| Other ^(1)^ | — | — | — | (457) | (457) | |||||
| Allocation of corporate costs | 1,426 | 880 | 1,711 | (4,017) | — | |||||
| Adjusted EBITDA | $ | (8,891) | $ | (1,448) | $ | 5,580 | $ | (5,964) | $ | (10,723) |
_______________________________
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.
| Three Months Ended June 30, 2019 | Rhode Island | Delaware | Biloxi | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 82,856 | $ | 25,751 | $ | 32,118 | $ | 2,493 | $ | 143,218 |
| Net income | $ | 21,549 | $ | 1,332 | $ | 4,470 | $ | (10,171) | $ | 17,180 |
| Interest expense, net of interest income | 955 | 59 | (8) | 8,206 | 9,212 | |||||
| Provision for income taxes | 8,009 | 512 | 1,192 | (3,568) | 6,145 | |||||
| Depreciation and amortization | 4,546 | 1,284 | 2,359 | 44 | 8,233 | |||||
| Non-operating income | — | (38) | — | (144) | (182) | |||||
| Acquisition, integration and restructuring expense | — | 922 | — | 1,317 | 2,239 | |||||
| Share-based compensation | — | — | — | 1,628 | 1,628 | |||||
| Professional and advisory fees associated with capital return program | — | — | — | 1,703 | 1,703 | |||||
| Credit Agreement amendment expenses ^(1)^ | 1,038 | — | — | 256 | 1,294 | |||||
| Other ^(1)^ | (519) | — | 275 | 249 | 5 | |||||
| Allocation of corporate costs | 2,570 | 1,112 | 1,005 | (4,687) | — | |||||
| Adjusted EBITDA | $ | 38,148 | $ | 5,183 | $ | 9,293 | $ | (5,167) | $ | 47,457 |
_______________________________
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.
TWIN RIVER WORLDWIDE HOLDINGS, INC.
Revenue and Reconciliation of Net Income to
Adjusted EBITDA by Segment (unaudited)
(in thousands)
| Six Months Ended June 30, 2020 | Rhode Island | Delaware | Biloxi | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 60,233 | $ | 27,550 | $ | 42,618 | $ | 7,671 | $ | 138,072 |
| Net (loss) income | (1,948) | (2,152) | 3,066 | (31,399) | (32,433) | |||||
| Interest expense, net of interest income | (56) | 77 | (13) | 26,475 | 26,483 | |||||
| (Benefit) provision for income taxes | (590) | (813) | 842 | (17,621) | (18,182) | |||||
| Depreciation and amortization | 9,533 | 2,918 | 4,501 | 1,170 | 18,122 | |||||
| Acquisition, integration and restructuring expense | — | 20 | — | 4,224 | 4,244 | |||||
| Goodwill and asset impairment | — | — | — | 8,554 | 8,554 | |||||
| Share-based compensation | — | — | — | 7,669 | 7,669 | |||||
| Professional and advisory fees associated with capital return program | — | — | — | (17) | (17) | |||||
| CARES Act credit ^(1)^ | (1,469) | (580) | (486) | (350) | (2,885) | |||||
| Credit Agreement amendment expenses ^(1)^ | — | — | — | 391 | 391 | |||||
| Gain on insurance recoveries^(1)^ | — | — | — | (1,026) | (1,026) | |||||
| Other ^(1)^ | — | — | — | 418 | 418 | |||||
| Allocation of corporate costs | 4,180 | 1,912 | 2,958 | (9,050) | — | |||||
| Adjusted EBITDA | $ | 9,650 | $ | 1,382 | $ | 10,868 | $ | (10,562) | $ | 11,338 |
_______________________________
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.
| Six Months Ended June 30, 2019 | Rhode Island | Delaware | Biloxi | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 168,980 | $ | 27,275 | $ | 63,149 | $ | 4,445 | $ | 263,849 |
| Net income | $ | 42,775 | $ | 1,332 | $ | 8,748 | $ | (18,079) | $ | 34,776 |
| Interest expense, net of interest income | 3,266 | 59 | (12) | 12,937 | 16,250 | |||||
| Provision for income taxes | 15,792 | 512 | 2,333 | (6,819) | 11,818 | |||||
| Depreciation and amortization | 8,962 | 1,284 | 4,666 | 90 | 15,002 | |||||
| Non-operating income | — | (38) | — | (144) | (182) | |||||
| Acquisition, integration and restructuring expense | — | 922 | — | 8,195 | 9,117 | |||||
| Share-based compensation | — | — | — | 1,779 | 1,779 | |||||
| Professional and advisory fees associated with capital return program | — | — | — | 1,703 | 1,703 | |||||
| Credit Agreement amendment expenses ^(1)^ | 1,038 | — | — | 591 | 1,629 | |||||
| Other ^(1)^ | (519) | — | 275 | (308) | (552) | |||||
| Allocation of corporate costs | 6,219 | 1,112 | 2,320 | (9,651) | — | |||||
| Adjusted EBITDA | $ | 77,533 | $ | 5,183 | $ | 18,330 | $ | (9,706) | $ | 91,340 |
_______________________________
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.
TWIN RIVER WORLDWIDE HOLDINGS, INC.
Calculation of Gross Gaming Revenue (unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except percentages) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||
| Gaming revenue | $ | 23,767 | $ | 100,234 | (76.3) | % | $ | 99,603 | $ | 191,102 | (47.9) | % |
| Adjustment for State of RI’s share of net terminal income, table games revenue and other gaming revenue ^(1)^ | 8,652 | 106,836 | 90,636 | 209,492 | ||||||||
| Adjustment for State of DE’s share of net terminal income, table games revenue and other gaming revenue at Dover Downs ^(1)^ | 6,084 | 20,964 | 23,922 | 22,483 | ||||||||
| Gross gaming revenue | $ | 38,503 | $ | 228,034 | (83.1) | % | $ | 214,161 | $ | 423,077 | (49.4) | % |
_______________________________
(1)Adjustment made to show gaming revenue on a gross basis consistent with gross gaming win data provided throughout the gaming industry.
Reconciliation of Net Income Per Diluted Share to
Adjusted Net Income Per Diluted Share (unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Net (loss) income per diluted share | $ | (0.77) | $ | 0.42 | $ | (1.04) | $ | 0.87 |
| Acquisition, integration and restructuring expense | 0.08 | 0.05 | 0.14 | 0.23 | ||||
| Goodwill and asset impairment (adjustment) | (0.01) | — | 0.28 | — | ||||
| Credit Agreement amendment expenses^(1)^ | — | 0.03 | 0.01 | 0.04 | ||||
| Professional and advisory fees associated with capital return program | — | 0.04 | — | 0.04 | ||||
| CARES Act credit^(1)^ | (0.09) | — | (0.09) | — | ||||
| Gain on insurance recoveries^(1)^ | — | — | (0.03) | — | ||||
| Other^(1)^ | (0.01) | — | 0.01 | (0.01) | ||||
| Tax effect of adjustments | 0.01 | (0.03) | (0.11) | (0.08) | ||||
| Adjusted net (loss) income per diluted share | $ | (0.79) | $ | 0.51 | $ | (0.84) | $ | 1.10 |
_______________________________
Note: Amounts in table may not subtotal due to rounding.
(1)See descriptions of adjustments in the “Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.