It’s been busy four months for Twin River Worldwide Holdings, and not just because the coronavirus pandemic forced government-mandated closures of its seven casinos while it closed on $275 million of additional debt to shore up its liquidity.
Last month the Rhode Island-based regional casino operator agreed to three casino acquisitions at a bargain-basement price that will diversify the company’s prospects as states slowly allow gaming to reopen over the next few weeks.
On Wednesday, Twin River said its first-quarter total revenues declined 9.5% to $109.1 million for the three months that ended on March 31. The company recorded a loss of $8.87 million and a 49.7% decline in cash flow.
CEO George Papanier said the raw numbers don’t really reflect the company’s whole story. In January and February, Twin River’s revenues were up 23.4% and March was headed in a similar direction until its casinos in Rhode Island, Mississippi, Delaware, and Colorado closed in an effort slow the spread of COVID-19.
“Our company started the year strong,” Papanier said. “While our full quarter results were meaningfully impacted by the closure of our properties in March, we have taken broad-based actions to reduce expenses and enhance liquidity.”
Twin River already had a deal in place from last year with Eldorado Resorts to acquire Isle of Capri Kansas City in Missouri and Lady Luck Vicksburg in Mississippi for $230 million. The deals are expected to close in June or July.
The company struck a second deal with Eldorado in April to acquire Eldorado Shreveport in Louisiana and the operations of MontBleu Resort Casino in Lake Tahoe, Nevada for a combined $155 million. Eldorado had a previous deal to sell both properties in a quest to clear Federal Trade Commission approval to complete its $17.3 billion merger with Caesars Entertainment. Eldorado took a lower price to make the transaction work.
Also, Twin River agreed to pay Caesars and real estate investment trust VICI Properties a combined $25 million for Bally’s Atlantic City, giving the company a resort on the famed Boardwalk.
Both deals are expected to close later this year.
Meanwhile, after closing on the new debt, Twin River now has $620 million in liquidity to help the company weather the shutdowns.
“Despite near-term uncertainties, we are confident that our strong balance sheet, liquidity, and long-term strategic planning will enable us to emerge from this crisis in an even better position,” Papanier said.
The company said it was establishing health and safety guidelines to prepare for reopenings, including the screening of employees and guests before entering properties, thermal imaging cameras, enforcement of social distancing guidelines, the spacing between slot machines/VLTs and limited or the closing of table games to begin. Twin River staff will also frequently clean and sanitize all areas, wear masks for protection, and produce public awareness signage.
Shares of Twin River closed at $15.01 on the Nasdaq Wednesday, down $1.02 or 6.36%. The Dow Jones fell more than 500 points and the Nasdaq was off 139 over market concerns with a second pandemic spread.
SunTrust Robinson gaming analyst Barry Jonas said Twin River’s regional portfolio, which will grow to 12 properties in eight states by the end of this year, is relatively well-positioned for a recovery from the pandemic.
“Twin River’s regional drive-to portfolio could see a faster recovery with a focus on high-frequency regional gamblers,” Jonas told investors. “Recent mergers and acquisitions add some regional-destination exposure, though the majority of (cash flow) comes from drive-to assets in non-urban locations.”
Jonas said recent tribal casino reopenings showed a “pent-up demand and a higher risk tolerance for core regional gamblers” even with the properties operating at 50% capacity.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
