Twin River Worldwide Holdings, Inc. (NYSE: TRWH) (the “Company”, “Twin River” or “TRWH”) today reported financial results for the second quarter ended June 30, 2019.
Financial Highlights – Second Quarter 2019 Compared to Second Quarter 2018
- Revenue increased 29.2% to $143.2 million
- Gross gaming revenue increased 26.5% to $228.0 million(1)
- Net income decreased 15.4% to $17.2 million
- Adjusted EBITDA increased 7.1% to $47.5 million
- Dover Downs contributed solid performance with $25.8 million of revenue
“We are pleased with the Company’s results in the quarter as the financial performance at Dover exceeded our already high expectations and our Rhode Island operations performed well despite some softness in the New England gaming markets in the second quarter,” said George Papanier, President and Chief Executive Officer. “Our emphasis of focusing on in-market and out-of-market accretive growth is also proving itself in the early going as we continue to grow prudently into a multi-state operator based in Rhode Island versus a single regional operator.”
Second Quarter 2019 Results
Revenue for the second quarter 2019 increased 29.2% to $143.2 million from $110.8 million in the second quarter 2018. The increase in revenue year-over-year was principally driven by the effects of the Dover Downs acquisition, which exceeded expectations on the top line in its first full quarter of ownership and contributed $25.8 million of revenue to the Company’s results for the second quarter. The second quarter was also favorably impacted by incremental revenue at the Tiverton Casino Hotel (“Tiverton”), which opened in the third quarter of 2018 and continued to ramp in the second quarter. The Company did note softness in the overall New England market throughout the second quarter of 2019, which was attributed to a challenging comparable period in 2018 resulting from pent up demand due to poor weather in the first quarter of the prior year, as well as the likely impact of decreased tax refund dollars in the current year as a result of federal tax legislation changes at the end of 2017. The Company notes that the impact of new competition in the region did impact revenue late in the second quarter, particularly at the Twin River Casino Hotel (“Lincoln”); however, the impact to the quarter was in line with the Company’s expectations.
Overall gaming revenue increased $18.0 million, or 21.8%, to $100.2 million, food & beverage revenue increased $6.5 million, or 52.9%, to $18.8 million, and hotel revenue increased $5.9 million, or 107.6%, to $11.4 million, in each case, compared to the same period in 2018.
Income from operations in the second quarter 2019 increased $2.4 million, or 7.7%, year-over-year to $33.8 million. This year-over-year increase, driven by the increase in revenues noted above, was positively impacted by the addition of Dover Downs and the incremental contribution from Tiverton in the quarter. Operating costs and expenses in the second quarter of 2019 include the impact of the following:
- increased corporate overhead costs of $1.1 million, reflecting the Company’s corporate investment in preparation of future growth and additional costs incurred by the Company to meet reporting requirements associated with being a publicly traded company;
- increased depreciation and amortization expense of $3.1 million driven by capital projects for Tiverton and the Hotel at Lincoln, which were completed in the second half of 2018, and the addition of Dover Downs;
- decreased share-based compensation expense of $4.4 million resulting from the timing of grants and settlement of awards which created expense volatility in 2018;
- approximately $1.7 million of professional and advisory fees incurred in the quarter associated with the Company’s capital return program; and
- increased acquisition and integration costs of $0.9 million driven by the pending acquisition of three Black Hawk, Colorado properties from Affinity Gaming and the recently announced pending acquisitions of the Isle of Capri Kansas City and Lady Luck Vicksburg casinos from Eldorado Resorts Inc.
Interest expense for the second quarter increased $4.9 million to $10.0 million as, on May 10, 2019, the Company extended its balance sheet by entering into a new credit facility and issued $400 million of 6.75% unsecured senior notes, which are described in more detail below.
Reflecting the items described above and an increase in the effective tax rate year over year, net income for the second quarter 2019 decreased $3.1 million, or 15.4%, to $17.2 million. Adjusted EBITDA for the second quarter 2019 was $47.5 million, an increase of $3.2 million, or 7.1%, from $44.3 million in the second quarter 2018.
