Eldorado reported $241 million in net revenue, $49.7 million in EBITDA and a net income of $9.7 million – breaking out to $0.20 per diluted share – for the third quarter of 2016, the company announced Thursday afternoon.
“Eldorado’s total net revenues, Adjusted EBITDA and consolidated Adjusted EBITDA margin for the 2016 third quarter were in line with the prior-year’s pro forma results, against what was our toughest comp quarter for the year,” said Gary Carano, Chairman and Chief Executive Officer of Eldorado.
While the top-line figures were substantially higher than the prior year quarter, they were bolstered by the company’s recent expansions in the Reno market, including the acquisitions of Circus Casino Reno and MGM’s 50 percent stake in Silver Legacy Resort Casino generating significant new revenue flow.
Regardless, the company registered respectable increases across all segments. Adjusted EBITDA at each of its gaming operations posted year-over-year growth for the quarter, with Reno Tri-Properties up 7.1%, Eldorado Scioto Downs increasing 4.4% and Eldorado Shreveport registering a 13.6% increase.
“Since the middle of 2014, we have successfully executed a multi-pronged growth strategy comprised of organic growth through targeted return focused facility enhancement projects, a $10 million cost savings program and refined operating management disciplines,” said Carano, adding that a series of accretive acquisitions that have brought enhanced scale, efficiency and operating margins.
At the company’s bread and butter properties in Reno, Eldorado, work has begun on a $50 million facilities enhancement program to elevate the gaming, entertainment, food and beverage and non-gaming amenities for customers while creating a luxury resort experience. The three-year project is not expected to bring major customer disruption, though each of the 4,100 rooms in Reno will receive a makeover.
Eldorado’s biggest news of the quarter was the September announcement of a $1.7 billion deal to acquire Isle of Capri, the regional gaming company.
“This acquisition represents a significant milestone in our long-term strategy to expand our regional gaming platform through accretive acquisitions and upon completion will dramatically increase the scale of our gaming operations and further diversify the geographic reach of our company,” said Carano, noting that he expects the deal to close in the second quarter of 2017.
Upon completion of the transaction, the combined company will offer 20,290 slot machines and video lottery terminals, more than 550 table games, and 6,550 hotel rooms.
“Eldorado has a wealth of proven gaming, hotel management and food and beverage managerial talent and we believe that a combined Eldorado and Isle of Capri can create substantial near- and long-term synergies and value for our combined shareholder base,” Carano added.
Eldorado was also confident in the position of its balance sheet, holding $44.6 million in cash and touting its ongoing debt reduction efforts.
“Eldorado’s total 2016 debt reduction through September 30, 2016 amounted to $77.7 million which combined with our Adjusted EBITDA growth lowered our trailing twelve month consolidated gross leverage ratio to 4.9x,” said Tom Reeg, Eldorado’s President and Chief Financial Officer.
“Going forward, our priority remains to deploy free cash flow from existing operations and the planned acquisition of Isle of Capri to reduce leverage and pursue future growth opportunities.”
