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MTR Gaming Group, Inc. (MNTG)
Q4 2007 Earnings Call
April 8, 2008 4:30 pm ET
Edson R. Arneault – President, Chief Executive Officer
John W. Bittner, Jr. – Chief Financial Officer
David R. Hughes – Executive Vice President, Strategic Operations
Lawrence Klatzkin – Jeffries & Co.
Steven Wieczynski – Stifel, Nicolaus & Company Inc.
Dennis Forst – Keybanc Capital Markets
Ricky Perret – KBC Peel Hunt
Steve Altebrando – Sidoti & Company LLC
Joe Houdet – Wachovia Securities
Nicholas Danna – Sterne, Agee & Leach
Michael Tucker – Andover Capital
» LaSalle Hotel Properties Q3 2009 Earnings Call Transcript
» Sykes Enterprises, Incorporated Q2 2009 Earnings Call Transcript
The company’s remarks may include forward-looking statements within the meaning of section 27(a) of the Securities Act of 1933 as amended, and section 21(e) of the Securities Exchange Act of 1934 as amended, concerning the company’s prospects. Actual results could differ materially from those projected or suggested in any forward-looking statement as a result of a variety of factors which are described in the company’s period reports filed with the Securities and Exchange Commission and in the company’s new releases.
Additionally, the company may discuss EBIDTA or earnings before interest, taxes, depreciation, and amortization, which is a non-GAAP financial measure. Such information and any disclosure required by SEC regulation ‘G’ can be found in the MTR April 7th, 2007, news release which is reproduced on the company’s website under investor relations.
Finally, under certain circumstances the federal securities laws may require the company to file a transcript of this call, including your questions, with the SEC. Accordingly, if you ask a question this company will assume that you have consented to the inclusion of your question and identity in any such required file.
After the speakers’ remarks there will be a question and answer session. (Operator Instructions). Thank you.
Mr. Ted Arneault, you may begin your conference.
Edson R. Arneault
First of all I’d like to thank everybody for our fourth quarter, turning end over fourth quarter and 2007 report. And I would just like to say that the fourth quarter was really what we regard as the culmination of kind of the preparation stage for our business plan that we really started about four years ago.
First I want to deal with the accounting issue that we’ve had. We did have an untimely filing of our 10K. It was late by, I think, a day and a half. And there were several issues involved. First of all, going from the fourth quarter, we had a table games implementation. At the same time in the first quarter we sold two of our what we considered non-strategic assets. We sold the real estate portion of the Speedway and also have a contract to sell as soon as the buyer would get licensed the gaming portion of the Speedway, which entailed a substantial amount of documentation be provided to the buyers. In addition, we sold Binion’s and likewise it was part of our overall plan in selling non-strategic assets that did require substantial amounts of time and effort in order to get that sale done.
Because of the fourth quarter results we had to deal with some of our banking issues which further delayed some of the accounting and projections that we were going to use and had to be provided to our auditors Ernst and Young so that they could give us a report. We did that after finishing the bank negotiations in late March. Ernst and Young felt they needed additional time to work out our projection in order to sign off.
Further complicating that, as probably some of you know, we were working on a couple, actually several strategic alternatives in the first quarter which also demanded a substantial amount of time and effort on our accounting staff. We are making some changes and we feel that we’ve got the system ready and in order to make sure we file on a timely manner. I don’t think we could ever see another quarter with as much activity as we saw in this first quarter, but we plan to make sure that those Ks not only are filed on time, but not extended in the future.
As I said, I look at the fourth quarter as the culmination of the implementation of our business plan. As you know, we had anticipated that at some time at MTR or Mountaineer we would have additional competition or at least the initiation of competition from other states. In anticipation of that we had built and moved Mountaineer to be a destination resort.
The key to establish Mountaineer as a destination resort was twofold. One, that it certainly helped us from a legislative stand point in having the legislature willing to work with us to increase the amount of gaming offerings we would have. And secondly, it became a requirement as part of the legislation in order to have table games.
Also part of the game plan, we felt that it was needed to have a presence in both Ohio and Pennsylvania to protect both sides of the Mountaineer market. To that end we built in Erie Presque Isle. We opened it in February of last year. And also acquired Scioto Downs, which while Ohio has not moved into any form of gaming legislation certainly it has been attempted. I think we would have to be imprudent if we felt that it wasn’t going to keep having attempts. If it does, you know, our Scioto Downs facility, I think, is as good as any location that they would have in the state of Ohio. So we proceeded over the last four years to develop the property with those goals in mind.