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The Majestic Star Casino, LLC Announces Second Quarter 2005 Results



Printer Friendly VersionPost a CommentTell a Friend about this Article12 August 2005
As reported by: PR Newswire via KVOA
The Majestic Star Casino, LLC ("MSC") today announced financial results for the three- and six-month periods ended June 30, 2005. MSC is a multi-jurisdictional gaming company that directly owns and operates one dockside gaming facility located in Gary, Indiana ("Majestic Star"), and through its wholly owned subsidiary, Majestic Investor Holdings, LLC ("MIH"), two Fitzgeralds brand casinos located in Tunica, Mississippi ("Fitzgeralds Tunica" or with respect to the operating subsidiary "Barden Mississippi Gaming, LLC") and Black Hawk, Colorado ("Fitzgeralds Black Hawk" or with respect to the operating subsidiary "Barden Colorado Gaming, LLC"). MSC also provides services to Barden Nevada Gaming, LLC ("BNG" or "Fitzgeralds Las Vegas") for a fee. BNG is owned by Barden Development, Inc. ("BDI"), the parent of MSC. Unless indicated otherwise, the "Company" refers to The Majestic Star Casino, LLC and all of its direct and indirect subsidiaries.

Consolidated Results: Three-Month Period Ended June 30, 2005

The Company's net revenues were $63.1 million, a decline of $3.9 million or 5.9% from the same period in 2004. Contributing to the decline in net revenues was a decrease in casino revenues, the primary revenue source for the Company, by $2.3 million or 3.3% to $68.3 million and an increase in promotional allowances of $2.2 million or 22.2% to $12.0 million. Promotional allowances are deducted from gross revenues to compute net revenues. The Company spent more in promotional allowances to offset marketing programs from competitors and to create incremental customer visits to its casinos.

The Company expects to report a net loss of $4.0 million compared to net income of $2.9 million for the same period in 2004. Contributing to the net loss in the current quarter was the decline in net revenues, a $2.3 million charge related to the mutual termination of the sale of our Black Hawk property and related catch-up depreciation and amortization of $1.4 million (for the period July 12, 2004 to March 31, 2005) (see discussion below), $0.3 million related to preparation for Sarbanes-Oxley 404 compliance, and expenses of $0.2 million incurred as the Company evaluated certain casino investment opportunities.

For the three-month period ended June 30, 2005, adjusted EBITDA was $13.0 million, compared to $15.4 million in the same period last year, a decrease of $2.4 million or 15.6%. Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation, amortization, and other non-operating expenses (primarily non-usage fees on the credit facility)), adjusted for loss on investment in Buffington Harbor Riverboats, LLC (which is depreciation expense) and certain non-recurring charges as identified in the table at the end of this press release, which reconciles net income (loss) to EBITDA and adjusted EBITDA. See Note 1 for a detailed explanation as to the usefulness and limitations of using EBITDA and adjusted EBITDA as a financial measure.
Article By: PR Newswire via KVOA

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