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Penn National Gaming (PENN)
Q4 2012 Earnings Call
January 31, 2013 10:00 am ET
Peter M. Carlino - Chairman of the Board and Chief Executive Officer
Timothy J. Wilmott - President and Chief Operating Officer
William J. Clifford - Chief Financial Officer and Senior Vice President of Finance
Eric Schippers - Senior Vice President, Public Affairs & Government Relations
Felicia R. Hendrix - Barclays Capital, Research Division
Joseph Greff - JP Morgan Chase & Co, Research Division
Carlo Santarelli - Deutsche Bank AG, Research Division
Richard A. Hightower - ISI Group Inc., Research Division
Shaun C. Kelley - BofA Merrill Lynch, Research Division
Dennis Farrell - Wells Fargo Securities, LLC, Research Division
Previous Statements by PENN
» Penn National Gaming Management Discusses Q3 2012 Results - Earnings Call Transcript
» Penn National Gaming Management Discusses Q2 2012 Results - Earnings Call Transcript
» Penn National Gaming's CEO Discusses Q1 2012 Results - Earnings Call Transcript
Thanks, Tina. Good morning and thanks everyone for joining Penn National Gaming's 2012 fourth quarter conference call and discussion of the planned REIT. We'll get to management's presentation and comments momentarily as well as your Q&A, but first I'll review the Safe Harbor disclosure.
In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements.
Today's call and webcast may include non-GAAP financial measures within the meaning of SEC Regulation G. And when required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website.
With that, I'm happy to turn the call over to Peter Carlino, the company's Chairman and CEO. Peter?
Peter M. Carlino
Well, thank you, Joe, and good morning, everyone. Well, to get right at it, the fourth quarter was a little softer than we and you all would have liked. We'll take some time perhaps to talk about some of the reasons for that. And then broadly, I think, you can define as well as I, the sense in the economy today. We had of course the election this fall. And I think in general, a despondency in the part of a lot of folks and a few of us still despondent following the results of that election. We've got higher taxes to deal with and despite promises that it wouldn't affect the middle class, we all know of course, that it has. So these are unsettled times.
Nonetheless, there's still lots of good stuff going on at Penn. Ohio continues to ramp-up for us. And I'm going to ask Tim to talk about this in much more detail. As we opened Penn National, I think we were pretty careful in saying then that we expected a multiyear evolution in a market that was largely new. We expect and I think you can count on pretty much the same effect in the Ohio markets as they mature over the next couple of years. Needless to say, we would have liked to have more out-of-the-box up front. But things are moving along well there and ultimately those properties will be everything that we think that they should be.
We've got the racetracks coming along and we'll probably get to that in more detail later. So all in all, I mean, it's a -- it was a tough last quarter, much tougher than we would have liked but this is a new year and we're off and running with a lot of good stuff. To me, it's making significant progress. Again, we'll answer your questions about that. So on balance, at Penn, we always take the long view and the long view in my mind looks very good. Tim, why don't you take some time and share your thoughts?
Timothy J. Wilmott
Thanks, Peter. I'd like to cover 3 different subjects at the outset of our call. The first is what we're seeing in Ohio. And clearly, we're seeing a slower ramp-up in slot volumes than we initially expected, especially in Columbus to a lesser extent in Toledo, but we thought we'd be further ahead in slot volumes than we actually are.
On the other side of it though, table games, food and beverage revenues and poker revenues are actually exceeding our expectations and have been very, very solid. We continue to work in Columbus to try to continue to penetrate new households and continue to introduce our Hollywood facility to the new customers in central Ohio. And in both Toledo and in Columbus, we do expect in January to show a sequential growth month-over-month in our slot volumes. So we are making progress. There's no questions, we look at the metrics in Ohio and we look at our penetration levels. We're going to get to where we want to be, it's just going to be a slower ramp-up than we had originally thought. So we're going to continue to stay focused very aggressively on introducing our Hollywood products to customers in those 2 markets and continue to grow the business as we progressed through 2013.