CHESTER - MTR Gaming's Mountaineer resort operation is showing signs of improvement, posting a double-digit gain in net revenue for the first quarter.
MTR Gaming President and Chief Executive Officer Jeffrey Dahl said Wednesday Mountaineer Casino, Racetrack and Resort has now shown revenue gains for two consecutive quarters, both in slot play ($46.3 million, up from $39.3 million in the same three-month period in 2011) and table gaming ($7.44 million, up from $7.3 million in the first quarter 2011). Adjusted earnings before interest, taxes, depreciation and amortization for the Chester resort was $12.8 million, up more than $3 million from the year ago figures.
During a conference call announcing its first-quarter results, Dahl credited the company's targeted marketing program as well as cost-cutting efforts, the improved economy and mild winter weather for the improved numbers.
"We're pleased that Mountaineer has turned the corner and is once again becoming a significant contributor to our growth," he said.
Overall, however, MTR Gaming posted a net loss of $3.2 million for the first three months of 2012, something it is blaming on higher interest expense associated with its 2011 debt refinancing. Dahl said that interest expense offset a near 10 percent companywide growth in net revenue, which stood at $108 million for the quarter. Adjusted EBITDA for the company as a whole was $20.5 million, a record.
He said the company's improved outlook "is not just a function of our revenue growth, but also how well we've optimized our cost structure."
Meanwhile, MTR's Ohio property, Scioto Downs, received its conditional gaming license to install and operate video lottery terminals. Dahl said they're planning a "soft opening" on June 1, allowing them a couple weeks to get the kinks out before the June 19 ribbon-cutting.
"We want to give ourselves a couple of weeks to get operations as efficient as possible before the grand opening," he said.
For the quarter, MTR's total net revenue was $108 million, compared to just over $98 million during the same period in 2011.
Dahl said Scioto Downs is "on track for a soft opening on June 1."
"It's been a long road, but the end is in sight," he said, noting they'll install 1,800 video lottery terminals on site immediately. "It will ramp up to over 2,100 when we complete Phase II by the end of July."
And with that project well on its way to completion, Dahl said they'll be looking now for new ways to grow the company. He offered no hints, however, as to the direction that growth might take.
"I think as we near the completion of the construction and convert Scioto from a development project to an operating entity, it would be natural for us to start thinking about other opportunities out there," he said. "We are looking, but (it's) nothing that I'm going to discuss today. But whatever is going to be in the best interests of the owners of this company, you can be sure it will be explored as diligently as possible."
MTR Gaming had offered to sell Shell Oil a 250-acre parcel adjacent to its Mountaineer resort property for a multi-billion ethane cracker plant, but the deal fell through when the project's footprint grew beyond the original acreage, putting it too close to the resort property next door.
And, Penn National's plans to relocate a Columbus track to Austintown, less than 50 miles from MTR's Mountaineer property and less than 100 miles from MTR's Presque Isle Downs, could be problematic.
"Penn has made it very clear they're hoping to go forward with that project," Dahl said, though pointing out that Mountaineer's ace in the hole is that it's a full-blown resort and, at any rate, they have a couple years to prepare for the new competition.
"We've faced competition in the primary market before," he said, "and fared very well. The last quarter gives us some (momentum)."
