Regional casino operator Twin River Worldwide Holdings had much different operating structure in the second quarter due to the various government-mandated COVID-19 health and safety guidelines in five states, plus the addition of two new properties to its growing portfolio.
The Rhode Island-headquartered company could have changed appearance by the end of the year as it awaits approvals on the pending acquisitions of three more casinos that will add three new states to its business.
CEO George Papanier said Tuesday Twin River reopened all nine of its casinos between May 21 and June 17 after being closed starting in mid-March due to the coronavirus pandemic.
The quarter also included the initial results from Casino Vicksburg (formerly Lady Luck Casino Vicksburg) in Mississippi and Casino KC (formerly Isle of Capri Casino) in Kansas City, Missouri. The properties were acquired from Eldorado Resorts for $230 million.
“Both of these properties experienced robust demand and have generated strong positive cash flow following their reopening and our subsequent acquisition,” Papanier said in a statement. “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.”
Twin River plans to spend $40 million to renovate the Kansas City casino, most likely starting next year.
For the quarter that ended June 30, revenue of $28.9 million – 78% of which came in June – declined 79.8% for the full three months. Twin River had a net loss of $23.5 million and of loss of $10.7 million in cash flow.
Papanier preferred to focus on individual properties. For example, Hard Rock Biloxi in Mississippi and Dover Downs in Delaware had “strong (cash flow) performance and significant market demand.” In Biloxi, overall revenue was up 2% from June 2019. He said the positive trends continued into July.
“Since reopening, where we have been permitted to operate under fewer capacity restrictions with more amenities, we are seeing strong demand,” Papanier said.
In Rhode Island, Twin River was only able to open its two casinos during a pre-opening period which was invitation-only with highly reduced capacity limits.
However, since opening to the public on June 20, with continued capacity restrictions and limited amenities, Twin River said revenue in Rhode Island with July’s results expected to be up approximately 240% compared with June 2020 on a preliminary basis. The casinos – Twin River and Tiverton – produced approximately 60% of the revenue during the same month a year ago. Cash flow, the company said, was positive in July.
Twin River has two other casino deals pending.
The company is acquiring Eldorado Shreveport in Louisiana and the operations of MontBleu Resort Casino in Lake Tahoe, Nevada for a combined $155 million from the former Eldorado Resorts, which has since completed its $17.3 billion merger with Caesars Entertainment and assumed the Eldorado name.
Separately, Twin River is spending $25 million to purchase Bally’s Atlantic City from Caesars.
On a conference call with analysts, Papanier said the company will continue to look at other casino purchasing opportunities.
Truist Securities gaming analyst Barry Jonas suggested in a research note that Caesars could continue to be a deal partner. The company has to sell at least three of its five casinos in Indiana and is looking at selling at least one of its eight resorts on the Las Vegas Strip.
“Management expects to stay on the offensive, continuing to look for accretive (acquisition) opportunities despite operations still ramping back up,” Jonas said.
Twin River ended the quarter with $331.1 million in cash and an available bank revolver of $250 million. Total debt at the end of June $972 million.
Shares of Twin River, traded on the Nasdaq, closed at $25.28 Tuesday, up $1.02 or 4.20%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
