New Ohio Racinos Meet Penn National Expectations
YOUNGSTOWN, Ohio — Penn National Gaming Inc. officials say they are basing their expectations for Austintown’s Hollywood Gaming at Mahoning Valley Race Course on early performance figures for its Hollywood Casino in Toledo.
On a conference call to discuss Penn National’s fourth-quarter performance, Timothy Wilmott, president and CEO, and Jay Snowden, chief operating officer, praised the early performance of the company’s two new Ohio properties, the Austintown racino and Hollywood Gaming at Dayton Raceway, which opened last year.
On Thursday, Wyomissing, Pa.-based Penn National reported net revenue of $651.4 million during the fourth quarter of 2014, with a net loss of $250.4 million and adjusted earnings of $64.0 million for the period. That was up from the $644.7 million for the fourth quarter in 2013 and the guidance of $621.1 for the period.
For the year, revenues totaled $2.59 billion, up from the $2.56 billion guidance but down from $2.92 billion in 2013. Net loss for the year was $233.2 million and adjusted earnings $285.1 million.
Reflecting on the fourth quarter results, “One of the things that we’re very pleased about is the first full quarter” at the new Ohio video lottery terminal operations, Wilmott said. “They are performing to our expectations and we’re very pleased with the start we’ve gotten at both of those operations,” he said.
The new racinos “continue to ramp up and certainly meet our internal expectations,” affirmed Jay Snowden, chief operating officer. Penn National modeled its guidance for the two properties on what it experienced in Toledo and Columbus, “those being two new markets for us in Ohio,” he said.
“We think that Toledo more mirrors what Mahoning Valley trends will likely be, given there’s more limited competition,” he continued. “Look at months four through 16 for Toledo and Columbus and you’ll have a good feel for what we’re anticipating in 2015 for top-line assumptions for those two businesses in Youngstown and Dayton. We’re happy with the results. We’re happy with the margins. We’re just in that post-opening stabilization mode and we anticipate being able to grow the top line from here.”
The fourth-quarter performance was “robust” and benefited from factors including milder weather than the previous year, lower gas prices, a favorable holiday calendar and, at the macroeconomic level, a stronger labor market and higher consumer confidence levels, Snowden said.
For 2015, the first full year with both Mahoning Valley and Dayton operating, Penn National anticipates a 6% increase in net revenue, said Saul Reibstein, senior vice president and chief financial and accounting officer.
Copyright 2015 The Business Journal, Youngstown, Ohio.
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