Bally’s Corporation (NYSE: BALY) (“Bally’s” or the “Company”)
today reported financial results for the second quarter ended June
30, 2024.
Second Quarter 2024 and Recent Highlights
- Company-wide revenue of $621.7 million, an increase of 2.5%
year-over-year
- Casinos & Resorts revenue of $343.1 million, up 3.0%
year-over-year
- UK online revenues grew 9% while overall International
Interactive revenue declined (7.4%) year-over-year to $229.4
million
- North America Interactive revenue of $49.2 million, up 94.7%
year-over-year
- Announced $2.07 billion in aggregate transactions with GLPI,
including $940 million of construction funding for Chicago
project
- Unveiled new site plan for permanent Bally’s Chicago Casino
with single-phase 500-room hotel tower build; demolition and site
prep on 30-acre development site now underway
- Entered into definitive agreement to merge with The Queen
Casino & Entertainment Inc., an affiliate of Standard General
L.P., where Bally’s stockholders will receive $18.25 per share in
cash or can elect to retain their investment
Summary of Financial Results
Quarter Ended June 30,
(in thousands)
2024
2023
Consolidated Revenue
$
621,657
$
606,206
Casinos & Resorts Revenue
343,051
333,162
International Interactive Revenue
229,396
247,774
North America Interactive Revenue
49,210
25,270
Net loss
(60,196
)
(25,651
)
Adjusted EBITDAR(1)
161,799
____________________________________
(1)
Refer to tables in this press
release for a reconciliation of this non-GAAP financial measure to
the most directly comparable measure calculated in accordance with
GAAP.
Robeson Reeves, Bally’s Chief Executive Officer, commented,
“Bally’s delivered solid 2024 second quarter operating results
during what remains an active period for our Company. Consolidated
revenue grew 2.5% to $621.7 million, driven by 3.0% growth in
Casinos & Resorts (“C&R”) revenue, 94.7% growth in North
America Interactive revenue, and 9% UK revenue growth, a record
performance. This was offset by declines in Asia and other markets,
resulting in a 7.4% overall decline in International Interactive
revenue. Subsequent to the second quarter end, we entered into a
binding term sheet for a $940 million strategic construction and
financing arrangement with Gaming & Leisure Properties (“GLPI”)
which includes funding to complete the construction of our flagship
permanent casino in the heart of downtown Chicago. The arrangement
also includes sale-leaseback transactions for our Kansas City and
Shreveport properties for $395 million and reiterates our
intentions for a sale-leaseback of our Lincoln property for $735
million.
“Last week, we entered into a definitive merger agreement with
The Queen Casino & Entertainment Inc. (“QC&E”), a regional
casino operator with four casinos across three states, which is
majority-owned by funds managed by Standard General L.P., also
Bally’s largest shareholder. As part of the merger transaction,
Bally’s stockholders will receive cash consideration of $18.25 per
Bally’s share with an option to elect to maintain their equity
investment in Bally’s. The addition of four properties to our
existing domestic property portfolio not only expands our platform
and databases but will further diversify the markets in which we
operate. The combination of QC&E’s development pipeline also to
our own growth pipeline provides the Company with a clear path
toward additional revenue, cash flow growth and value accretion. We
expect to provide more details around this transformative
transaction in a forthcoming proxy statement.
“Casinos & Resorts revenue of $343.1 million benefited from
the ongoing ramp of operations at our Chicago Temporary Casino and
stability across most of our portfolio, offset by the closure of
Tropicana and in part by property-specific headwinds in certain
markets. The Chicago Temporary Casino, having now welcomed more
than one million total visitors, continues to gain traction with
players and our local database is growing. In Rhode Island, local
bridge construction on Interstate 195 has led to lane closures
which disrupt traffic during peak periods, impacting visitation to
our Lincoln property. In addition, we experienced an increase in
promotional activity from certain Massachusetts properties which we
are managing through. Finally, though we continue to invest in our
Atlantic City property, turnover in our relationship marketing team
impacted second quarter results for this market. Reflecting the
impact on operations in these markets, second quarter segment
adjusted EBITDAR declined 10% year-over-year.
“In the UK, we continued to see healthy revenue growth of 9% (8%
in constant currency) while overall International Interactive
revenues declined by 7.4% year-over-year to $229.4 million due to
lower revenues from our non-UK operations. Despite the overall
revenue decline in International Interactive, adjusted EBITDAR
margins improved 130 basis points year-over-year, leading to
overall International Interactive adjusted EBITDAR of $81.3
million, down 3.9% year-over-year. The strength of our UK market
reflects continuing iGaming share gains and the initial results
from accelerating the soft launch of our online sports betting
offering. Outside the UK, our business in Asia was challenged in
the quarter as we continue to work through several logistical and
operational hurdles which directly impacted players. We believe the
Asian Interactive market remains an attractive opportunity and we
will continue to work to manage and grow our position in this
important region.
“Our North America Interactive operations generated second
quarter revenues of $49.2 million, up 94.7% year-over-year, and an
Adjusted EBITDAR loss of $6.8 million. We outperformed our internal
expectations for this segment in the second quarter as we benefited
from strong performance from our iGaming operations in Rhode
Island. Further, we continue to generate excellent results in our
New Jersey and Pennsylvania iGaming markets as well as from our
Bally Bet OSB operations, driven in part by the ongoing integration
of the Kambi and White Hat technology platforms which have garnered
positive player feedback and enhanced our ability to deliver a
leading product offering.”
George Papanier, Bally’s President, added, “While certain market
specific events impacted performance, the rest of the C&R
portfolio grew 19% year-over-year, and excluding Chicago, grew 3%,
demonstrating the resilience of our portfolio. Unique growth
initiatives such as our Chicago development add to the overall
attractiveness of Bally’s. Progress at our Chicago project
continues, with our recent announcement of the funding agreement
with GLPI and the redesign of the all-new permanent Bally’s Chicago
Casino setting the stage for the creation of a flagship casino
resort destination in the heart of downtown Chicago. We have now
taken control of the former Chicago Tribune site and are in the
process of beginning the demolition and site prep work we need to
complete before construction can begin. At the same time, we are
working through an approval process with the City given the recent
change to the site plan which now includes the construction of a
500-room hotel tower as part of a single-phase project. We also
continue to ramp up operations at the Chicago Temporary Casino with
improving utilization and a growing database of players along with
ongoing efforts to round out the amenities available to our
players. Given the favorable adult population and demographic
comparison to other large metropolitan casino resort markets, we
are in a great position in Chicago to achieve attractive long-term
returns on this project and look forward to working closely with
the community to bring our vision to life. Outside of Chicago, we
continue to manage our business for long-term growth and remain
optimistic regarding our C&R portfolio and its future
prospects.”
Marcus Glover, Bally’s Chief Financial Officer, concluded, “The
diversity of our asset portfolio was again on display in the second
quarter of 2024 as we generated healthy financial performance even
in the face of some property-specific headwinds. We remain focused
on optimizing our cost structure and enhancing operating efficiency
as we continue to build our businesses and operate them cohesively.
These efforts have delivered initial successes, and they remain a
priority as we move through the balance of the year.”
2024 Guidance
The Company's annual guidance for revenues is a range of $2.5
billion to $2.7 billion and adjusted EBITDAR is a range of $655
million to $695 million. Bally's currently expects to be at the
lower end of the range for the year. The Company continues to take
mitigation measures and has implemented tighter capital allocation
strategies to maintain or improve its free cash flow position.
2024 targets for capital expenditures and software development
costs for the core portfolio are now reduced by approximately $50
million to an expected $115 million for the year. This does not
include developmental CapEx for projects such as the Tropicana or
the permanent casino development in Chicago. The Tropicana
demolition and site preparation for delivering the site to the A's
will be funded by GLPI pursuant to the Company's prior agreement
and will be added to its rent base for the land lease. For Chicago,
GLPI will be funding some of the construction costs directly,
including long lead-time materials and infrastructure, while
Bally's will be responsible for demolition, site prep, and soft
costs such as architectural and engineering expenses.
Bally’s guidance is based on current plans and expectations and
contains several assumptions. The guidance is subject to a number
of known and unknown uncertainties and risks, including those
discussed under “Cautionary Note Regarding Forward Looking
Statements” set forth below.
Reconciliation of GAAP Measures to Non-GAAP Measures
To supplement the financial information presented on a generally
accepted accounting principles (“GAAP”) basis, Bally’s has included
in this earnings release non-GAAP financial measures for
consolidated Adjusted EBITDA and segment Adjusted EBITDAR, which
exclude certain items described below. The reconciliations of these
non-GAAP financial measures to their comparable GAAP financial
measures are presented in the tables appearing below.
“Adjusted EBITDA” is earnings, or loss, for Bally’s, or where
noted Bally’s reportable segments, before, in each case, interest
expense, net of interest income, provision (benefit) for income
taxes, depreciation and amortization, non-operating (income)
expense, acquisition and other transaction related costs,
share-based compensation, and certain other gains or losses as well
as, when presented for Bally’s reporting segments, an adjustment
related to the allocation of corporate costs among segments.
“Segment Adjusted EBITDAR” is Adjusted EBITDA (as defined above)
for Bally’s reportable segments, plus rent expense associated with
triple net operating leases for the real estate assets used in the
operation of the Bally’s casinos and the assumption of the lease
for real estate and land underlying the operations of the Bally’s
Lake Tahoe property. For the International Interactive, North
America Interactive, and Other segments, Segment Adjusted EBITDAR
and segment Adjusted EBITDA are equivalent due to a lack of triple
net operating lease for real estate assets used in those
segments.
Management has historically used consolidated Adjusted EBITDA
and segment Adjusted EBITDAR when evaluating operating performance
because Bally’s believes that these metrics are necessary to
provide a full understanding of Bally’s core operating results and
as a means to evaluate period-to-period performance. Management
also believes that consolidated Adjusted EBITDA and segment
Adjusted EBITDAR are measures that are widely used for evaluating
operating performance of companies in Bally’s industry and a
principal basis for valuing such companies as well. Consolidated
Adjusted EBITDAR is used outside of our financial statements solely
as a valuation metric. Management believes Consolidated Adjusted
EBITDAR is an additional metric traditionally used by analysts in
valuing gaming companies subject to triple net leases since it
eliminates the effects of variability in leasing methods and
capital structures. Consolidated Adjusted EBITDA and segment
Adjusted EBITDAR should not be construed as alternatives to GAAP
net income as an indicator of Bally’s performance. In addition,
consolidated Adjusted EBITDA or segment Adjusted EBITDAR as used by
Bally’s may not be defined in the same manner as other companies in
Bally’s industry, and, as a result, may not be comparable to
similarly titled non-GAAP financial measures of other
companies.
Bally’s does not provide a reconciliation of Adjusted EBITDAR on
a forward-looking basis to net income, its most comparable GAAP
financial measure, because Bally’s is unable to forecast the amount
or significance of certain items required to develop meaningful
comparable GAAP financial measures without unreasonable efforts.
These items include depreciation, impairment charges, gains or
losses on retirement of debt, acquisition, integration and
restructuring expenses, interest expense, share-based compensation
expense, professional and advisory fees associated with Bally’s
capital return program and variations in effective tax rate, which
are difficult to predict and estimate and are primarily dependent
on future events, but which are excluded from Bally’s calculation
of Adjusted EBITDAR. Bally’s believes that the probable
significance of providing this forward-looking valuation metric
without a reconciliation to the most directly comparable GAAP
metric, is that investors and analysts will have certain
information that Bally’s believes is useful and meaningful in
valuing its business. Investors are cautioned that Bally’s cannot
predict the occurrence, timing or amount of all non-GAAP items that
may be excluded from Adjusted EBITDAR in the future. Accordingly,
the actual effect of these items, when determined, could
potentially be significant to the calculation of Adjusted
EBITDAR.
Second Quarter Conference Call
Bally’s second quarter 2024 earnings conference call and audio
webcast will be held today, Wednesday, July 31, 2024, at 4:30 p.m.
EDT. To access the conference call, please dial (800) 274-8461
(U.S. toll-free) and reference conference ID BALYQ224. The webcast
of the call will be available to the public, on a listen-only
basis, via the Internet at the Investors section of Bally’s website
at www.ballys.com. An online archive of the webcast will be
available on Bally’s website for 120 days. Supplemental materials
have also been posted to the Investors section of the website under
Events & Presentations.
About Bally’s Corporation
Bally's Corporation is a global casino-entertainment company
with a growing omni-channel presence. It currently owns and manages
15 casinos across 10 states, a golf course in New York, a horse
racetrack in Colorado, and has access to OSB licenses in 18 states.
It also owns Bally's Interactive International, formerly Gamesys
Group, a leading, global, online gaming operator, Bally Bet, a
first-in-class sports betting platform, and Bally Casino, a growing
iCasino platform.
With 10,600 employees, the Company's casino operations include
approximately 15,300 slot machines, 580 table games and 3,800 hotel
rooms. Upon completing the construction of a permanent casino
facility in Chicago, IL, and a land-based casino near the Nittany
Mall in State College, PA, Bally's will own and/or manage 16
casinos across 11 states. Bally’s also has rights to developable
land in Las Vegas post the closure of the Tropicana. Its shares
trade on the New York Stock Exchange under the ticker symbol
“BALY”.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements may generally be identified by the use of words such as
“anticipate,” “believe,” “expect,” “intend,” “plan” and “will” or,
in each case, their negative, or other variations or comparable
terminology. These forward-looking statements include all matters
that are not historical facts. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future. As a result, these statements are not guarantees of future
performance and actual events may differ materially from those
expressed in or suggested by the forward-looking statements. Any
forward-looking statement made by Bally’s in this press release,
its reports filed with the Securities and Exchange Commission
(“SEC”) and other public statements made from time-to-time speak
only as of the date made. New risks and uncertainties come up from
time to time, and it is impossible for Bally’s to predict or
identify all such events or how they may affect it. Bally’s has no
obligation, and does not intend, to update any forward-looking
statements after the date hereof, except as required by federal
securities laws. Factors that could cause these differences include
those included in Bally’s Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other reports filed by Bally’s with the
SEC. These statements constitute Bally’s cautionary statements
under the Private Securities Litigation Reform Act of 1995.
BALLY’S CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per share
data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenue:
Gaming
$
524,751
$
493,296
$
1,040,808
$
980,191
Non-gaming
96,906
112,910
199,331
224,735
Total revenue
621,657
606,206
1,240,139
1,204,926
Operating (income) costs and
expenses:
Gaming
236,170
218,939
472,314
436,600
Non-gaming
48,713
52,276
96,824
104,620
General and administrative
252,419
249,957
500,855
501,565
Gain from sale-leaseback, net
—
(135
)
—
(374,321
)
Depreciation and amortization
78,782
79,187
238,528
153,748
Total operating costs and expenses
616,084
600,224
1,308,521
822,212
Income (loss) from operations
5,573
5,982
(68,382
)
382,714
Other (expense) income:
Interest expense, net
(74,200
)
(67,093
)
(147,331
)
(130,357
)
Other non-operating income, net
6,930
6,811
11,484
9,421
Total other expense, net
(67,270
)
(60,282
)
(135,847
)
(120,936
)
(Loss) income before income taxes
(61,697
)
(54,300
)
(204,229
)
261,778
(Benefit) provision for income taxes
(1,501
)
(28,649
)
29,881
109,093
Net (loss) income
$
(60,196
)
$
(25,651
)
$
(234,110
)
$
152,685
Basic (loss) earnings per share
$
(1.24
)
$
(0.48
)
$
(4.85
)
$
2.82
Weighted average common shares outstanding
- basic
48,498
53,942
48,308
54,173
Diluted (loss) earnings per share
$
(1.24
)
$
(0.48
)
$
(4.85
)
$
2.80
Weighted average common shares outstanding
- diluted
48,498
53,942
48,308
54,582
BALLY’S CORPORATION
Revenue and Reconciliation of
Net (Loss) Income and Net (Loss) Income Margin to
Adjusted EBITDAR and Adjusted
EBITDA Margin (unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(In thousands, except percentages)
2024
2023
2024
2023
Revenue
$
621,657
$
606,206
$
1,240,139
$
1,204,926
Net (loss) income
$
(60,196
)
$
(25,651
)
$
(234,110
)
$
152,685
Interest expense, net of interest
income
74,200
67,093
147,331
130,357
Provision (benefit) for income taxes
(1,501
)
(28,649
)
29,881
109,093
Depreciation and amortization
78,782
79,187
238,528
153,748
Non-operating income (1)
(3,127
)
(5,395
)
(2,130
)
(9,252
)
Foreign exchange (gain) loss
(983
)
1,639
(3,799
)
5,947
Transaction costs(2)
11,119
16,434
17,913
38,452
Restructuring charges(3)
376
3,440
18,989
20,262
Tropicana Las Vegas demolition
costs(4)
12,261
—
12,261
—
Decommissioning costs(5)
—
2,343
—
2,343
Share-based compensation
4,472
6,290
7,530
12,330
Gain on sale-leaseback, net
—
(135
)
—
(374,321
)
Planned business divestiture(6)
—
190
—
2,054
Impairment charges(7)
12,757
9,653
12,757
9,653
Other(8)
1,902
3,599
1,379
3,042
Adjusted EBITDA
$
130,062
$
130,038
$
246,530
$
256,393
Rent expense associated with triple net
operating leases(9)
$
31,737
$
63,384
Adjusted EBITDAR
$
161,799
$
309,914
Net (loss) income margin
(9.7
)%
(4.2
)%
(18.9
)%
12.7
%
Adjusted EBITDA margin
20.9
%
21.5
%
19.9
%
21.3
%
________________________________
(1)
Non-operating (income) expense
includes: (i) change in value of commercial rights liabilities,
(ii) gain on extinguishment of debt, (iii) non-operating items of
equity method investments including our share of net income or loss
on an investment and depreciation expense related to our Rhode
Island joint venture, and (iv) other (income) expense, net.
(2)
Includes acquisition, integration
and other transaction related costs, including costs incurred to
address the Standard General takeover bid and financing costs
incurred in connection with the prior year sale lease-back
transaction.
(3)
Restructuring charges
representing the severance and employee related benefits related to
the announced Interactive business restructuring initiatives and
the closure of the Company’s Tropicana Las Vegas property on April
2, 2024.
(4)
Demolition costs associated with
the Tropicana Las Vegas property which is part of the plan to
redevelop the site with a state-of-the-art integrated resort and
ballpark. As part of the binding term sheet, GLPI has agreed to
reimburse the Company for such expenses and will increase rent to
reflect the additional funding.
(5)
Costs related to the
decommissioning of the Company's sports betting platform in favor
of outsourcing the platform solution to third parties.
(6)
Losses related to a North America
Interactive business that Bally’s was marketed as held-for-sale in
2023.
(7)
Includes impairment charges on
long-lived assets in the second quarter of 2024 and impairment
charges related to assets held-for-sale in 2023.
(8)
Other includes the following
items: (i) non-routine legal expenses and settlement charges for
matters outside the normal course of business, (ii) insurance and
business interruption recoveries, and (iii) other individually de
minimis expenses.
(9)
Consists of the operating lease
components contained within our triple net master lease with GLPI
for the real estate assets used in the operation of Bally’s
Evansville, Bally’s Dover, Bally’s Quad Cities, Bally’s Black Hawk,
Hard Rock Biloxi and Bally’s Tiverton, the individual triple net
lease with GLPI for the land underlying the operations of Tropicana
Las Vegas, and the triple net lease assumed in connection with the
acquisition of Bally’s Lake Tahoe for real estate and land
underlying the operations of the Bally’s Lake Tahoe facility.
BALLY’S CORPORATION
Revenue and Segment Adjusted
EBITDAR (unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(In thousands)
2024
2023
2024
2023
Revenue
Casinos & Resorts
$
343,051
$
333,162
$
685,380
$
661,948
International Interactive
229,396
247,774
464,079
493,346
North America Interactive
49,210
25,270
90,680
49,632
Total
$
621,657
$
606,206
$
1,240,139
$
1,204,926
Adjusted EBITDAR(1)
Casinos & Resorts
$
99,801
$
111,005
$
189,219
$
216,128
International Interactive
81,292
84,574
164,824
164,875
North America Interactive
(6,757
)
(17,685
)
(16,915
)
(28,248
)
Other
(12,537
)
(16,536
)
(27,214
)
(33,804
)
Total
$
161,799
$
309,914
________________________________
(1)
Segment Adjusted EBITDAR is Bally’s reportable segment GAAP measure
and its primary measure for profit or loss for its reportable
segments. “Segment Adjusted EBITDAR” is Adjusted EBITDA (as defined
above) for Bally’s reportable segments, plus rent expense
associated with triple net operating leases for the real estate
assets used in the operation of the Bally’s casinos and the
assumption of the lease for real estate and land underlying the
operations of the Bally’s Lake Tahoe property. For the
International Interactive, North America Interactive, and Other
segments, segment Adjusted EBITDAR and segment Adjusted EBITDA are
equivalent due to a lack of triple net operating lease for real
estate assets used in those segments.
BALLY’S CORPORATION
Selected Financial Information
(unaudited)
Balance Sheet
Data
(in thousands)
June 30, 2024
December 31,
2023
Cash and cash equivalents
$
154,733
$
163,194
Restricted cash
169,616
152,068
Term Loan Facility(1)
$
1,896,375
$
1,906,100
Revolving Credit Facility
350,000
335,000
5.625% Senior Notes due 2029
750,000
750,000
5.875% Senior Notes due 2031
735,000
735,000
Less: Unamortized original issue
discount
(21,785
)
(23,756
)
Less: Unamortized deferred financing
fees
(36,459
)
(39,709
)
Long-term debt, including current
portion
$
3,673,131
$
3,662,635
Less: Current portion of Term Loan and
Revolving Credit Facility
$
(19,450
)
$
(19,450
)
Long-term debt, net of discount and
deferred financing fees; excluding current portion
$
3,653,681
$
3,643,185
Cash Flow
Data
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2024
2023
2022
2024
2023
2022
Capital expenditures
$
35,709
$
75,868
$
61,565
$
63,762
$
119,546
$
116,081
Cash paid for capitalized software
10,626
7,199
16,499
24,209
14,342
31,455
Acquisition of gaming licenses
—
8,250
50,700
1,211
10,150
51,560
Cash payments associated with triple net
operating leases(2)
29,950
29,516
13,000
59,901
58,610
23,000
_________________________________
(1)
In 2023, the Company entered certain currency swaps to
synthetically convert $500 million of its Term Loan Facility to
€461.6 million fixed-rate Euro-denominated instrument due October
2028 paying a weighted-average fixed-rate coupon of approximately
6.69% per annum. The Company also entered certain currency swaps to
synthetically convert $200 million notional amount of its floating
rate Term Loan Facility to an equivalent £159.2 million
GBP-denominated floating rate instrument with tenor of the swap
instrument due October 2026. As part of the Company’s risk
management program, managing our overall interest rate exposure,
the Company entered into $500 million notional in interest rate
collar arrangements maturing in 2028 where our SOFR floating rate
interest is capped at 4.25%, with a weighted average SOFR floor
rate of 3.22%, pursuant to the interest rate collar arrangements.
(2)
Consists of payments made in connection with Bally’s triple net
operating leases, as defined above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731078190/en/
Investor Contact Marcus
Glover Chief Financial Officer 401-475-8564 ir@ballys.com
Media Contact James Leahy,
Joseph Jaffoni, Richard Land JCIR 212-835-8500 baly@jcir.com
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From Sep 2023 to Sep 2024