MTR Gaming fourth-quarter EBITDA drops by $3.7 million as compared to prior-year period

By Jennifer Lanning Drey

Portland, Ore., April 7 - MTR Gaming Group Inc. posted EBITDA of $8.0 million for the fourth quarter of 2007, down from EBITDA of $11.7 million in the fourth quarter of 2006, a decrease the company said was caused by a decline in revenues at its Mountaineer Casino property coupled with increased expenses related to the implementation of table games at the facility.

"In the fourth quarter, we were kind of hit by the perfect storm where you had competition coming in, the economy having its own issues ... and having to incur the costs of preparing for table games," Edson R. Arneault, chief executive officer of MTR, said during the company's fourth-quarter earnings conference call on Monday.

The company implemented table games at Mountaineer late in the fourth quarter, which made it difficult to immediately determine their potential impact. However, MTR believes the addition of table games will make the property a "destination location," while also spurring a resurgence in slot play at Mountaineer and helping the company combat increased competition coming from Pennsylvania.

MTR also said its fourth-quarter EBITDA loss was partially offset by a $6.4 million EBITDA contribution from the Presque Isle Downs property, which opened in February 2007.

For full-year 2008, MTR is projecting EBITDA of at least $72 million, an increase of at least 30% over 2007. The company also expects to grow total revenues by 15% in 2008 as compared to 2007.

MTR is working to improve its balance sheet through the sale of non-strategic assets, such as its recent sales of the Binion's Gambling Hall and Hotel and the Speedway Casino's property in Las Vegas.

The company had cash and cash equivalents of $31.0 million at Dec. 31, according to its earnings release.

Untimely 10-K filing

During Monday's call, Arneault also addressed the company's late filing of its most recent 10-K with the Securities and Exchange Commission.

According to the CEO, there was a higher-than-normal level of documentation and extra time required in preparing the filing due to factors including the asset sales, the table games implementation and bank issues. As a result, the company was delayed in providing the report to its auditors, who in turn requested more time to review the filing.

"I don't think we could ever see another quarter with as much activity as we saw in this first quarter," Arneault said.

The company believes it will be able to file in a timely manner in the future.

MTR is a Chester, W.Va.-based company involved in gaming, horseracing and hotel properties.

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