Twin River Worldwide Holdings, Inc. (NYSE: TRWH) (the "Company" or "TRWH") has reported financial results for the first quarter ended March 31, 2019
First Quarter and Recent Highlights
Summary of First Quarter Financial Results
Three Months Ended March 31,
2019 First Quarter Results
Net revenue for the first quarter 2019 increased 15.1% to $120.6 million from $104.8 million in the first quarter 2018. The increase in net revenue year-over-year can be attributed primarily to the opening of the Tiverton Casino Hotel ("Tiverton") and the new hotel at Twin River Casino Hotel ("Twin River") in September and October of 2018, respectively. Gaming revenue increased $11.3 million, or 14.2%, food & beverage revenue increased $2.0 million, or 17.6%, and hotel revenue increased $1.9 million, or 41.6%, each compared to the same period in 2018. The acquisition of Dover Downs, which closed on March 28, 2019, contributed approximately $1.5 million of net revenue to our results for the first quarter.
Income from operations in the first quarter 2019 increased $5.4 million, or 21.8%, year-over-year to $30.3 million. Income from operations for the first quarter 2019 includes the negative impact of $6.4 million of merger and going public expenses and the first quarter 2018 includes a $5.9 million disposal loss from the sale of the Newport Grand Casino ("Newport Grand"). Excluding the impact of these charges, income from operations in the first quarter 2019 increased $6.0 million, or 19.5%, to $36.7 million, compared to the first quarter 2018. Income from operations in the first quarter 2019 was positively impacted by increased revenue and a decrease in share-based compensation expense when compared to the comparable period in 2018, offset in part by increases in both advertising, general and administrative expenses ("AG&A") and depreciation and amortization. The $7.3 million increase in AG&A is primarily attributable to the increased overhead costs of Tiverton in the current year compared to Newport Grand last year and ongoing corporate costs associated with the Company being publicly traded. Increased depreciation and amortization was driven by the opening of Tiverton and the new hotel at Twin River.
Net income for the first quarter 2019 increased $5.0 million, or 39.3%, to $17.6 million due primarily to increased income from operations noted above and a reduction in the effective tax rate partially offset by a $1.3 million increase in interest expense.
Adjusted EBITDA for the first quarter 2019 was $43.9 million, an increase of $0.9 million, or 2.2%, from $43.0 million in the first quarter 2018. This increase is driven by the increase in income from operations noted above excluding the year-over-year impact of non-cash share-based compensation expense which was lower in 2019 primarily due to the timing of performance award grants and the reduction in the number of liability classified awards compared to the prior year.
Balance Sheet and Liquidity
The Company had $103.0 million in cash and cash equivalents, excluding restricted cash, at March 31, 2019. Outstanding indebtedness, before the impact of deferred financing costs, at the end of the first quarter 2019 totaled $421.2 million, including $80.0 million outstanding under the Company's revolving credit facility.
On May 10, 2019 the Company completed its previously announced debt financing, comprised of a $250 millionrevolving credit facility (the "revolver") and a $300 million term loan with maturity dates of 2024 and 2026, respectively, as well as $400 million of senior unsecured notes due 2027. The revolver was undrawn at closing. The Company used the net proceeds from the term loan and unsecured notes to repay borrowings under its prior revolver and term loan, aggregating $421.2 million as of March 31, 2019. The balance net of costs of approximately $260 million is in addition to the Company's cash balance at the end of the first quarter of $103 million, and will be used for general corporate purposes, which could include, in addition to funding operations, repurchases of our common stock, acquisitions and other transactions.
Reconciliation of GAAP Measures to Non-GAAP measures
To supplement the financial information presented on a generally accepted accounting principles ("GAAP") basis, the Company has included in this earnings release non-GAAP financial measures for Adjusted EBITDA, Adjusted EBITDA margin, gross gaming revenue, and adjusted income from operations. The non-GAAP measure Adjusted EBITDA excludes depreciation, amortization, interest expense and income, net, provision for income taxes, merger and going public expenses, loss associated with Newport Grand land and building disposal, non-cash share-based compensation expense, non-recurring litigation expenses, legal and financial expenses for strategic review, acquisition-related costs associated with announced planned acquisitions in Colorado, credit agreement amendment expenses, storm-related repairs, and non-recurring expansion and pre-opening expenses. Adjusted EBITDA margin is Adjusted EBITDA divided by net revenue. Gross gaming revenue is net gaming revenue inclusive of the States of Rhode Island and Delaware's share of net terminal income, tables games revenue and other gaming revenue. Adjusted income from operations is income from operations excluding merger and going public expenses and disposal loss from the sale of the Newport Grand.
The reconciliation of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. The Company believes that presenting non-GAAP financial measures aids in making period-to-period comparisons and is a meaningful indication of its actual operating performance. The Company's management utilizes and plans to utilize this non-GAAP financial information to compare the Company's operating performance to comparable periods and to internally prepared projections. The Company's non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.
First Quarter Conference Call
The Company's first quarter 2019 earnings conference call and audio webcast will be held today, Tuesday, May 14, 2019, at 5:00 PM EDT. To access the conference call, please dial (877) 791-0146 (U.S. toll-free) and reference conference ID number 2691717. The webcast of the call will be available to the public, on a listen-only basis, via the Internet at the Investors section of the Company's website at www.twinriverwwholdings.com. An online archive of the webcast will be available on the Company's website for 120 days.
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