UNCASVILLE, Conn: Mohegan Gaming & Entertainment ("MGE" or the "Company"), a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut, Mohegan Sun Pocono in Plains Township, Pennsylvania, the MGE Niagara Resorts in Niagara Falls, Canada and INSPIRE Entertainment Resort in Incheon, South Korea, announced today operating results for its fourth fiscal quarter ended September 30, 2020."The MGE team and our property portfolio performed remarkably well during the fiscal fourth quarter. Despite re-opening the majority of our properties in the summer with COVID-related reductions in capacity and entertainment offerings, consolidated Adjusted EBITDA for the September quarter was only down modestly compared to last year, demonstrating the overall resilience of our business and the strength of our product and brand," said Mario Kontomerkos, President & Chief Executive Officer of MGE. "Importantly, excluding the impact of the MGE Niagara Resorts, which were closed during the period, same-store adjusted EBITDA grew 15.9% over the prior year, while same-store Adjusted EBITDA margins improved over 800bps. Recent steep increases in infections in virtually all of our markets globally has resulted in temporary weakness in business volumes at our operations and has slowed progress in both the construction of Inspire Korea and in the re-opening of the MGE Niagara Resorts and the Mohegan Sun Casino in Las Vegas. Looking beyond the virus, however, we remain quite positive as our business has been optimized to benefit from what we foresee to be significant pent-up demand for leisure consumption in the months and years ahead." Selected consolidated operating results for the fourth quarter ended September 30, 2020 and prior year period (unaudited): Net revenues of $294.0 million vs. $414.0 million in the prior year period, a 29.0% decrease; Income from operations of $50.2 million vs. $15.7 million in the prior year period, a 219.7% increase; and Adjusted EBITDA of $82.8 million vs. $89.4 million in the prior year period, a 7.4% decrease. Consolidated net revenues decreased 29% driven primarily by the continued closure of MGE Niagara Resorts along with declines in retail, F&B and entertainment revenues at Mohegan Sun and Mohegan Pocono. These declines can be largely attributed to COVID-related closures and reductions in capacity or similar protocols. Declines in revenue were partially offset by positive growth in gaming revenues at Mohegan Sun. Adjusted EBITDA decreased 7.4% during the quarter, reflecting the impact of the continued closure of MGE Niagara Resorts. Excluding the impact of Niagara Resorts, which were closed during the quarter, consolidated net revenues decreased by 12.8% and Adjusted EBITDA increased 15.9%, reflecting stronger EBITDA performance both from Mohegan Sun and in the Management, Development and Other segment. Margin performance was driven by lower overall payroll and marketing expenses, permanently reducing the overall cost structure at MGE. Mohegan Sun
Operating results (in thousands, unaudited):
For the Three Months Ended
September 30,
September 30,
Percentage
2020
2019
Variance
Variance
Net revenues
$ 211,814
$ 249,928
$(38,114)
(15.2%)
Income from operations
$ 62,498
$ 43,488
$ 19,010
43.7%
Adjusted EBITDA
$ 80,113
$ 64,811
$ 15,302
23.6%
Net revenues declined 15.2% during the quarter, driven by declines in non-gaming revenues due to COVID-related closures and voluntary reductions in non-gaming capacity. Declines in non-gaming revenues were partially offset by a 4.8% increase in gaming revenues during the period. Slot volumes declined 9.7%, while table volumes decreased 4.8%, with declines in volumes offset by a 71 basis point and 234 basis point increase in net hold rate, respectively, highlighting the reduction in the promotional activity in the period. Adjusted EBITDA increased during the quarter, reflecting significantly better margin performance due to declines in overall labor, marketing and promotional expenses. Overall EBITDA margin at the property improved to 37.8%, up 1,189 basis points from 25.9% in the prior year quarter. Assuming stable revenues, we expect to retain a material portion of this expense improvement going forward.
Mohegan Sun Pocono
Operating results (in thousands, unaudited):
For the Three Months Ended
September 30,
September 30,
Percentage
2020
2019
Variance
Variance
Net revenues
$ 55,592
$ 63,629
$ (8,037)
(12.6%)
Income (loss) from operations (1)
$ 7,562
$ (31,263)
$ 38,825
N.M.
Adjusted EBITDA
$ 10,804
$ 11,759
$ (955)
(8.1%)
______________
(1) Loss from operations for the three months ended September 30, 2019, includes a $39.5 million impairment charge related to Mohegan Sun Pocono's goodwill. N.M. - Not Meaningful. Net revenues declined 12.6% during the quarter, primarily driven by declines in non-gaming revenues which were adversely impacted by COVID-related closures and mandated reductions in capacity. Gaming revenues experienced a more modest 1.9% decline, reflecting positive contributions from iGaming and Unibet Sportsbook. Adjusted EBITDA decreased 8.1% during the quarter, reflecting better margin performance due to declines in overall labor, marketing and promotional expenses. Assuming stable revenues, we expect to retain a material portion of this expense improvement going forward. MGE Niagara Resorts
Operating results (in thousands, unaudited):
For the Three Months Ended
September 30,
September 30,
Percentage
2020 (1)
2019
Variance
Variance
Net revenues
$ 12,423
$ 91,237
$(78,814)
N.M.
Income (loss) from operations
$ (14,513)
$ 4,784
$(19,297)
N.M.
Adjusted EBITDA
$ (9,071)
$ 10,191
$(19,262)
N.M.
______________
(1) The MGE Niagara Resorts were temporarily closed during the three months ended September 30, 2020 due to COVID-19. N.M. - Not Meaningful. EBITDA losses at MGE Niagara reflect the impact of the property being temporarily closed for the three months ending September 30, 2020, due to restrictive COVID-19 mandated measures implemented by the Ontario Government. Despite the decline in Adjusted EBITDA, cash flows from the MGE Niagara Resorts during the quarter were approximately breakeven, as the properties continue to receive both the Fixed Service Provider Fee as well as Permitted Capital Expenditures while closed. Additionally, Fallsview rent payments have been deferred to the end of the initial lease term while closed, minimizing the overall cash flow impact on MGE during the quarter and while the property is closed. Efforts to reopen the properties continue, but we are unable to predict when they will reopen at this time.
Management, Development and Other
Operating results (in thousands, unaudited):
For the Three Months Ended
September 30,
September 30,
Percentage
2020
2019
Variance
Variance
Net revenues
$ 13,177
$ 9,961
$ 3,216
32.3%
Income (loss) from operations
$ (286)
$ 820
$ (1,106)
N.M.
Adjusted EBITDA
$ 6,028
$ 4,806
$ 1,222
25.4%
______________
N.M. - Not Meaningful.
Net revenues increased due to continued growth in management fees from ilani, driven by continued EBITDA growth at the property despite several disturbances during the quarter in the nearby Portland, Oregon feeder market and COVID-related impacts. EBITDA performance also reflects higher expenses associated with ongoing domestic and international development efforts.
Corporate
Operating results (in thousands, unaudited):
For the Three Months Ended
September 30,
September 30,
Percentage
2020
2019
Variance
Variance
Net revenues
$ 303
$ 20
$ 283
N.M.
Loss from operations
$ (5,079)
$ (1,468)
$ (3,611)
N.M.
Adjusted EBITDA
$ (5,057)
$ (1,450)
$ (3,607)
N.M.
______________
N.M. - Not Meaningful.
The decline in Adjusted EBITDA was principally due to the impact of certain non-recurring payroll and consulting credits in the prior year.
MGE Property Information
Net Revenues
Income (Loss) from Operations
Adjusted EBITDA
(in thousands, unaudited)
For the Three Months Ended
For the Three Months Ended
For the Three Months Ended
September 30,
September 30,
September 30,
September 30,
September 30,
September 30,
2020
2019
2020
2019
2020
2019
Mohegan Sun$ 211,814$ 249,928
$ 62,498
$ 43,488
$ 80,113
$ 64,811
Mohegan Sun Pocono
55,592
63,629
7,562
(31,263)
10,804
11,759
MGE Niagara Resorts
12,423
91,237
(14,513)
4,784
(9,071)
10,191
Management, development and other
13,177
9,961
(286)
820
6,028
4,806
Corporate
303
20
(5,079)
(1,468)
(5,057)
(1,450)
Inter-segment
701
(769)
(32)
(705)
(32)
(705)
Total
$ 294,010$ 414,006
$ 50,150
$ 15,656
$ 82,785
$ 89,412
Other Information
Liquidity As of September 30, 2020 and September 30, 2019, MGE held cash and cash equivalents of $112.7 million and $130.1 million, respectively. Inclusive of letters of credit, which reduce borrowing availability, MGE had $50.8 million of borrowing capacity under its senior secured revolving facility and line of credit as of September 30, 2020. |