Mohegan Tribal ends Q2 with cash and equivalents of $59.9 million; gaming figures decline

By Lisa Kerner

Charlotte, N.C., April 30 - Mohegan Tribal Gaming Authority's properties performed "quite well" compared to many regional peers during the second fiscal quarter, considering uncontrollable factors such as unfavorable weather, a sluggish economic backdrop and tough comparisons, according to chief executive officer Mitchell Grossinger Etess.

The Authority released its earnings for the second quarter of fiscal 2014 on Wednesday.

Mohegan ended the quarter on March 31 with cash and cash equivalents of $59.9 million compared to $63.6 million as of Sept. 30.

The company had $39 million drawn on its $100 million revolving credit facility and $6.5 million drawn on its $16.5 million line of credit at quarter-end. As of March 31, letters of credit issued under the Authority's revolving credit facility totaled $2.9 million, of which no amounts were drawn.

In April, the Authority began a consent solicitation to amend the indenture governing its 9¾% senior unsecured notes due 2021 to permit refinancing. Also, the Authority began a tender offer to purchase for cash any and all of its 11% senior subordinated notes due 2018 and a related consent solicitation.

Financial highlights

Mohegan's interest expense decreased by 14.7% to $36.3 million compared to the prior-year period, according to the earnings news release.

The decrease was attributed to a lower weighted average interest rate driven by the Authority's August and November 2013 refinancing transactions.

As of March 31, the Authority's weighted average interest rate was 8.2%, compared to 10.1% in the second quarter of fiscal 2013. Weighted average outstanding debt was $1.76 billion for the second quarter, compared to $1.71 billion a year ago.

Distributions to the Tribe totaled $10 million for each of the quarters ended March 31, 2014 and 2013. For fiscal 2014, distributions to the Tribe are expected to total $50 million.

Financial highlights

For the second quarter, Mohegan's net revenues declined 2.8% to $316.7 million from the prior year.

Gaming revenues were down 4.5% to about $278 million, gross slot revenues fell 6% to about $194 million, and table game revenues decreased 1.2% to $82 million year over year.

Mohegan reported second-quarter adjusted EBITDA of $66.2 million for the quarter, a 15% decline from the same period a year ago.

Income from operations was down 19.4% to about $45 million from the second quarter of fiscal 2013.

Net income attributable to the Authority was $9.6 million, a 31.6% decrease from the second quarter of fiscal 2013, according to the earnings news release.

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

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