Penn National Posts Strong Second Quarte

Charles Town Races with its 2,587 slot and video lottery machines continues to be the primary engine driving growth at Penn National Gaming. A 27.6% increase in revenue at the West Virginia track helped its parent company deliver a 25% increase in revenue to $165 million, a 70% increase in net income to $11 million, and a 40% rise in earnings per share to 28 cents for the second quarter ending June 30.

The second quarter financials do not include a $3 million non-operating charge associated an interest rate swap. After the charge is considered, Penn National Gaming's net income increases 41% to $9.2 million and earnings per share are 15% higher at 23 cents.

Peter Carlino, Penn National's chief executive officer, said the racing and casino company set records not considering the additional charge. He attributed the strong performance to expansions, upgrades, and a focus on strengthening management.

"During the quarter we adhered to our core growth strategy, opening the 291-room Bay Tower Hotel at Casino Magic Bay St. Louis in May, and adding 587 new slot machines and a new parking facility at Charles Town," Carlino said. "The expanded facilities now accommodate more guests and provide even higher levels of gaming entertainment and both properties are positioned as super regional entertainment centers. Both projects were completed on time and on budget, and reflect our commitment to prudent capital investments in our properties."

Charles Town's revenue increased to $60.9 million for the second quarter, up from $47.7 million for the same period a year ago. For the year so far, the track has generated $118 million in revenue, up from $88.6 million for the first six months of 2001.

Revenue at the company's two racetracks--Penn National Race Course and Pocono Downs--and 11 off-track betting parlors increased 9% to $28.65 million for the quarter. For the year, the racing revenue is up 6.6% to $53.6 million.