Mohegan Tribal Gaming results impacted by table game revenue decline

By Lisa Kerner

Charlotte, N.C., Jan. 30 - Mohegan Tribal Gaming Authority's first-quarter fiscal 2014 results were mixed, impacted "significantly" by a "very unusual table game hold percentage" at Mohegan Sun, said chief executive officer Mitchell Grossinger Etess during the company's first quarter fiscal 2014 earnings call on Thursday.

Table game hold at Mohegan Sun decreased 300 basis points to 13.3% for the quarter ended Dec. 31, from 16.3% in the prior-year period.

Overall table game revenues were down 11.2% at $75.5 million year over year.

The authority completed two refinancing transactions that "dramatically improved" the balance sheet and reduced the debt cost of capital by about 150 bps, said chief financial officer Mario Kontomerkos on the call.

Specifically, on Nov. 19, the authority completed a series of refinancing transactions relating to its prior bank credit facilities and second-lien senior secured notes.

The authority obtained $955 million of senior secured credit facilities, comprised of a $100 million revolving facility, a $125 million term loan A facility and a $730 million term loan B facility. Simultaneously, the authority repaid and terminated its prior bank credit facilities and repurchased or redeemed all of its outstanding second-lien senior secured notes, according to the earnings news release.

Estimated annualized interest savings are expected to be at least $16 million.

The authority incurred a $62.1 million loss on early extinguishment of debt as a result of the transactions.

At Dec. 31, total debt was $1.75 billion, and total leverage was 5.69 times.

Kontomerkos said the authority had $14 million drawn on its $100 million revolver and about $73.8 million available for borrowing under its bank credit facility and line of credit.

Cash and cash equivalents at the end of the quarter totaled $75.6 million, and liquidity totaled about $83.7 million, according to the CFO.

Consolidated financial highlights

First-quarter net revenues were down 3.7% year over year at $312.8 million.

Adjusted EBITDA declined 26.7% to $53.7 million.

Income from operations was $33.3 million, a 36.3% decrease from the prior-year period.

Net loss attributable to the authority was $67.3 million, compared to net income of $9.1 million for the first quarter of fiscal 2013.

Mohegan Tribal Gaming is an Uncasville, Conn., operator of gaming and entertainment enterprises.

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