Penn's First Quarter Sets Records, But Profits Still Slide

Penn National Gaming reported record earnings and revenue for the first quarter ending March 31, but also had profits slip after a large write-off of debt.

Revenue for the quarter rose 46.1% to $153.6 compare with $105.1 million for the same period a year ago. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 50.3% to $33.5 million from $22.3 million for the same quarter of 2001. The main driver for both financial categories was Charles Town Races, the racetrack and casino in eastern West Virginia that operates 2,000 slot and video poker machines. Charles Town revenue grew 39% for the quarter to $57.1 million and EBITDA increased 32% to $14.5 million.

Net income for the Pennsylvania-based racing and casino company fell 10.4% to $4.1 million, or 23 cents per diluted share, down from $4.6 million, or 30 cents for the first quarter of 2001. What drove down net income was an extraordinary charge of $5.1 million for the early retirement of debt. Before the one-time charge, Penn National reported net earnings of 52 cents per share.

"Penn National was very active on many fronts during the first quarter to drive our earnings growth in the future periods," said Peter Carlino, chief executive officer. Earlier this year, the company raised $96.1 million through a common stock offering and sold $175 million in bonds.

"These financings afford us the flexibility to pursue other expansion opportunities and we are analyzing transactions both in-market and in new regions," Carlino said.