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MTR Gaming Group Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 12:26PM
MTR Gaming Group Inc. (MNTG) filed Quarterly Report for the period ended 2011-09-30. Mtr Gaming Group Inc. has a market cap of $40 million; its shares were traded at around $1.45 with and P/S ratio of 0.1. Mtr Gaming Group Inc. had an annual average earning growth of 4.5% over the past 10 years. GuruFocus rated Mtr Gaming Group Inc. the business predictability rank of 4-star.
Highlight of Business Operations:During the nine months ended September 30, 2011, revenues from gaming operations decreased by $12.5 million, or 7.8%, to $147.7 million compared to the same period of 2010; and the gross profit margin decreased to 38.3% in 2011 from 38.7% in 2010. The decline in the gross profit margin resulted primarily from the 7.8% decrease in total gaming revenue with only a 7.2% decrease in operating costs. Revenues from slot operations decreased by $5.1 million to $123.7 million in 2011 compared to $128.8 million in 2010, and poker and table gaming revenue decreased by $7.4 million in the aggregate, generating revenues of $1.9 million and $22.1 million, respectively, in 2011 compared to $3.3 million and $28.1 million, respectively, in 2010.
The average daily room rate ("ADR") for the Grande Hotel (exclusive of complimentary room provided to gaming patrons) decreased to $70.58 during the third quarter of 2011 from $84.46 during the same period of 2010. The ADR (inclusive of complimentary rooms) decreased to $49.30 from $59.74 during the same three-month periods, respectively; however, the average occupancy rate increased to 94.7% from 87.2%, respectively. During 2011, RevPAR (or revenue per available room) was $46.89 compared to $52.14 during 2010. The decrease in daily room rates and increase in occupancy primarily reflects a shift in marketing strategies to market the hotel to gaming patrons. Year-to-date, the ADR (exclusive of complimentary rooms provided to gaming patrons) decreased to $69.63 during the first nine months of 2011 from $78.38 during the same period of 2010. The ADR (inclusive of complimentary rooms) decreased to $50.75 from $54.59 during the same nine-month periods, respectively; however, the average occupancy rate increased to 87.0% from 85.7%. During 2011, RevPAR (or revenue per available room) was $44.28 compared to $46.66 during 2010.
During the nine months ended September 30, 2011 Presque Isle Downs' net revenues increased by $6.7 million, or 4.6%, compared to the nine months ended September 30, 2010, primary due to an increase in incremental table gaming revenue of $10.5 million, offset by a decrease in slot revenues of $3.3 million. Revenues from other sources, including pari-mutuel commissions and food and beverage, decreased by $0.2 million compared to the prior year period. Also, as a result of table gaming operations, promotional allowances increased by $0.3 million. Presque Isle Downs' operating margin increased to 15.2% in 2011 (exclusive of a $5.8 million charge for other gaming assessment costs) from 13.9% in 2010 (exclusive of project-opening costs of $1.4 million) due primarily to increased revenues, operational efficiencies and the property's cost containment efforts.
Gaming Operations. Revenues from gaming operations during the three months ended September 30, 2011 decreased by $2.4 million, or 4.5%, to $50.5 million compared to the three months ended September 30, 2010; and the gross profit margin increased to 38.6% in 2011 compared to 35.9% in 2010. The decrease in revenues from gaming operations is primarily due to road construction and traffic delays on each of the casino's primary feeder highways (which is expected to continue into the foreseeable future), as well as increased competitive pressures and weak economic conditions, and the increase in the gross profit margin is attributed to operational efficiencies. During the nine months ended September 30, 2011, revenues from gaming operations increased by $7.2 million, or 5.3%, to $143.5 million compared to the same period of 2010; and the gross profit margin increased to 38.0% in 2011 compared to 36.0% in 2010. During the three- and nine-month periods of 2011, Presque Isle Downs experienced an increase in table gaming revenue of $0.2 million and $10.5 million, respectively; and experienced a decrease in slot revenues of $2.6 million and $3.3 million, respectively.
Food and beverage operations. Revenues from food and beverage operations during the three months ended September 30, 2011 were $3.2 million, which decreased by $0.6 million, or 15.9%, compared to the same period of 2010, primarily due to a decrease in slot patron traffic. However, operating expenses only decreased by $0.2 million resulting in a gross profit margin that decreased to 20.1% in 2011 from 28.4% in 2010. The primary reason for the decrease was a 4% increase in food costs. During the nine months ended September 30, 2011, revenues from food and beverage operations were $8.5 million, which represents a decrease of $0.4 million, or 5.0%, compared to the same period in 2010, and operating expenses decreased by $0.3 million resulting in a gross profit margin of approximately 18.5% during 2011 compared to 19.4% during 2010.
Stocks Discussed: MNTG,