Penn National Gaming, Inc. (PENN: Nasdaq) today reported record third quarter results for the period ended September 30.
Third quarter revenues for the pari-mutuel and casino company rose 21% to $175.4 million, up from $145 million in the third quarter of 2001. Third quarter 2002 EBITDA (earnings before interest, taxes, depreciation and amortization), rose 18.2% to $38.1 million, from $32.2 million for the same period a year ago. Net income in the third quarter of 2002, before a non-operating charge of $2.4 million ($0.03 per diluted share after tax) for the change in the fair value of interest rate swaps, rose 48.4% to $11.4 million, or $0.28 per diluted share, compared to net income of $7.7 million, or $0.24 per diluted share, in the third quarter of 2001.
Reflecting the charge for the change in the fair value of interest rate swaps, Penn National reported net income of $9.9 million, or $0.25 per diluted share. Per share results are based on 40.2 million and 32.0 million diluted weighted average shares outstanding for the 2002 and 2001 periods, respectively, and have been adjusted to reflect the June 2002 two-for-one stock split.
"Penn National's 21% revenue gain and 48% rise in net income before the interest rate swap charge is impressive for several reasons," said Peter M. Carlino, chief executive officer of Penn National. "First, except for a small contribution from Bullwhackers, the 2002 third quarter represents the first quarter this year in which we are comparing all of the operations on a same-store basis to those operated at the same time last year."
The third quarter also represents a 15% rise in aggregate EBITDA from casinos operating in Mississippi and Louisiana in addition to the Charles Town Races track in West Va, according to Carlino. Charles Town alone achieved a 30% gain in EBITDA. The Boomtown Biloxi, Casino Magic Bay St. Louis and Casino Rouge properties all outperformed other casinos in their respective markets. Their growth offset a 3% decline ub EBITDA from the casino management contract at Casino Rama in Ontario and a 16.5% drop in EBITDA at Pennsylvania and New Jersey pari-mutuel racing operations.
"We are of course hopeful that the potential for slots at Pennsylvania tracks continues to advance as this would not only benefit our operations there, but will also address the state's meaningful budget deficit and bolster the horse racing and agricultural industries which are among the state's largest employers," Carlino said