| ATLANTIC CITY, N.J. - March 2, 2006 -- Trump Entertainment Resorts,
Inc. (NASDAQ NMS: TRMP):
-- Company completes year of major changes
-- Reports fourth quarter net loss of ($0.73) per share compared to
($3.34) in fourth quarter 2004
-- 2006 to be year of focus on operations, construction, and development
Trump Entertainment Resorts, Inc. (the "Company") (NASDAQ NMS: TRMP)
today reported its operating results for the fourth quarter ended December
31, 2005. The Company's loss from continuing operations was ($26.1) million
or ($0.86) per share for the quarter ended December 31, 2005, compared
to the ($108.9) million loss or ($3.64) per share of our Predecessor Company
for the quarter ended December 31, 2004. Net loss, including the results
of our discontinued operations, was ($22.1) million or ($0.73) per share
in the fourth quarter of 2005 verses a net loss of ($99.8) million or ($3.34)
per share in the fourth quarter of 2004.
For the period from May 20, 2005 (the effective date of the Company's
reorganization) through December 31, 2005, loss from continuing operations
was ($36.3) million or ($1.19) per share. Net loss, including the results
of our discontinued operations was ($26.5) million or ($0.87) per share.
Donald J. Trump, Chairman of the Board commented, "2005 was a year of
tremendous accomplishment for Trump Entertainment Resorts. The reorganization
in May, which resulted in the Company achieving a much more favorable capital
structure, was the catalyst for a series of significant events that have
us excited about the future. We began by restructuring the management team
with several proven leaders in the gaming industry. Through this team,
we are implementing a series of operational changes at our properties.
We completed the sale of Trump Indiana, which together with our available
credit facilities, has allowed us to initiate an aggressive capital plan
to improve and expand our facilities.
I am very excited about the Company's prospects in 2006 and beyond."
A summary of results follows:
Reorganized Predecessor
Company Company
-------------- ---------------
Three months ended December 31,
-------------------------------
In millions except per share data
2005
2004
-------------- ---------------
Net revenues
$ 234.7 $
236.7
Adjusted EBITDA
27.5
41.0
Income (loss) from operations
6.8 (50.4)
(Loss) from continuing operations
(26.1) (108.9)
Discontinued operations
4.0
9.1
Net (loss)
(22.1) (99.8)
Basic and diluted share data
Continuing operations
$ (0.86) $
(3.64)
Discontinued operations
0.13
0.30
------------ -------------
$ (0.73) $
(3.34)
============ =============
As a result of our reorganization effective in May 2005, the comparability
of our operating results from continuing operations for the fourth quarter
of 2005 verses fourth quarter 2004 were impacted by the following items:
1. Overall interest expense decreased by $25.0 million from $57.2 million
to $32.2 million due to the decrease in debt levels and interest rates.
2. Depreciation and amortization decreased by $8.1 million from the
revaluation of our assets on May 20, 2005.
3. Our fourth quarter 2005 loss from continuing operations includes
a minority interest benefit of $6.5 million.
4. The provision for income taxes includes a non cash charge-in-lieu
of income taxes of $8.7 million.
Significant expenses impacting the loss from continuing operations during
the fourth quarter of 2005 and 2004 and for the period from May 20, 2005
through December 31, 2005 are as follows:
Predecessor
Reorganized Company
Company
------------------------------ ---------------
For the period
from May 20,
2005 to Three months Three
months
December 31, ended December ended December
2005 31, 2005
31, 2004
-------------- --------------- ---------------
Reorganization expenses
and related costs $
9.1 $ 1.4
$ 59.3
Stock-based compensation
expense
1.7
1.7
-
Development costs
5.1
1.1
0.8
Severance and management
recruitment costs
3.3
3.0
-
Property tax reserve
-
-
8.0
----------- ------------ ------------
$ 19.2 $
7.2 $ 68.1
=========== ============ ============
The Company reported adjusted EBITDA of $27.5 million on net revenues
of $234.7 million in the fourth quarter of 2005 compared to adjusted EBITDA
of $41.0 million in 2004 on net revenues of $236.7 million.
Adjusted EBITDA is EBITDA excluding reorganization expenses and related
costs, development costs, severance costs and property tax reserve. EBITDA
and Adjusted EBITDA are not Generally Accepted Accounting Principles ("GAAP")
measurements, but are commonly used in the gaming industry as measures
of performance and as a basis for valuation of gaming companies. Refer
to the selected financial information accompanying this press release for
a reconciliation of income from operations to Adjusted EBITDA.
Mark Juliano, the Company's Chief Operating Officer commented, "Our
fourth quarter financial statements continue to reflect matters associated
with the Company's reorganization and as a result, generally, are not comparable
to prior periods. While revenues decreased in the fourth quarter we are
beginning to see the impact of the change in our marketing strategy as
promotional allowances decreased by $10.7 million. While these changes
have negatively impacted revenue and profitability in the short term, they
are designed to enable us to realize margin improvements going forward.
We began the process of making the necessary operating and cultural changes
at our properties with the expectation that it would take approximately
18 months before we would see the full benefits. I believe we are on track
to meet this timeframe with the changes we have implemented, in conjunction
with the additional changes we have planned. To date, we have streamlined
the management structure at our properties and have begun the process of
implementing a renewed focus on how we spend our marketing dollars. In
2006, we will continue to modify and refine our marketing efforts and will
implement a data warehouse which will allow us to build programs around
our most profitable customers, we will implement further operating efficiencies
through the introduction of centralized scheduling and yield management
systems. As part of our renewed emphasis on customer service, we will also
initiate customer courtesy and leadership training programs at our three
casinos."
The Company indicated that fourth quarter results are also impacted
by costs associated with the changes made to streamline the management
structure at the properties and complete the management team at the corporate
office, increased utilities costs and costs connected with the Company's
development efforts in Philadelphia.
James B. Perry, Chief Executive Officer and President added, "With the
sale of Trump Indiana closing in December 2005, we had in excess of $228.5
million in cash and cash equivalents at December 31, 2005, and had $200
million available under the revolving credit portion of our credit facility
and $150 million available under the delayed draw term loan. In December,
we announced the first phase of our capital improvement plan to spend some
$110 million on the reinvigoration of our properties. This plan will include
projects at all three of our properties, including improved restaurant
and retail venues, more exciting casino floors, improved meeting and convention
space and rethemed entertainment areas, as well as completing the renovation
of all our rooms and suites. In addition, we plan to commence construction
of a new tower at the Taj Mahal in June 2006, which should enable us to
maximize operating results by taking advantage of existing capacity on
the gaming floor and in our restaurant and convention facilities."
Perry concluded, "In addition, we continue to look for growth opportunities
beyond Atlantic City, both domestic and internationally, that would enable
us to lever the Trump brand. We are excited about the prospects of our
proposed casino in Philadelphia and are preparing for the first set of
public hearings to be held in April 2006. We are also actively pursuing
a potential venture in Johnston, Rhode Island, near Providence. While this
project would be several years in the future, we believe it could prove
to be a great growth opportunity for Trump Entertainment Resorts if expanded
gaming is approved in Rhode Island. Additionally, we are continuing to
look for opportunities that will allow us to introduce the Trump brand
to other gaming markets and diversify our cash flows."
Both the operating results prior to the effective date of the Company's
plan of reorganization on May 20, 2005 ("Effective Date") and for the period
commencing on the Effective Date through December 31, 2005 are reflected
in the attached statements of operations. To facilitate analysis and comparison
with the prior year, the results of the Company's operating entities have
been combined to include both the prior period and the period following
the Effective Date for the year ended December 31, 2005 in the attached
supplemental schedules.
2006 Outlook:
The Company announced the following relating to expected financial performance
in 2006:
1. The Company expects to begin to see year over year gains in revenues
towards the end of the first quarter as a result of the initial operational
and marketing changes that have been implemented. The Company expects to
see improvements in EBITDA from these changes beginning sometime in the
second quarter.
2. The Company expects stock based compensation expense for 2006 to
be approximately $5 million. Stock based compensation is a non cash operating
expense.
3. Depreciation expense should be approximately $75 million for the
year ended December 31, 2006.
4. Interest expense for 2006 will be approximately $120 million to
$125 million.
5. In 2006, the Company expects to record a total provision for income
taxes of $9 million to $11 million including a non cash charge-in-lieu
of taxes of $4 million to $5 million.
6. Capital expenditures are expected to be as follows:
Retheming and updating capital
$75 to $85 million
Taj Mahal expansion
$25 to $30 million
Maintenance and technology
$55 to $65 million
---------------------
2006 estimated range
$155 to $180 million
=====================
7. The above mentioned items are being supplied under the assumption
that there will be no material changes in economic conditions, applicable
legislation or regulation, world events or other circumstances beyond the
Company's control that may adversely affect the Company's results of operations
or financial condition.
TRUMP ENTERTAINMENT RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Reorganized Company Predecessor Company
----------------------------------------------
May 20, 2005 January 1, 2005
Year Ended
through
through
December 31,
December 31, 2005 May 19, 2005
2004
---------------------------------------------
Revenues:
Gaming
$ 663,140 $ 398,409
$ 1,069,463
Rooms
48,257 26,360
75,996
Food and beverage
77,806 44,198
127,348
Other
26,833 12,809
42,608
-------------- ------------- ------------
816,036 481,776
1,315,415
Less promotional
allowances
(188,254) (117,337) (312,477)
-------------- ------------- ------------
Net revenues
627,782 364,439
1,002,938
Costs and expenses:
Gaming
307,384 186,545
498,449
Rooms
17,922 9,805
27,040
Food and beverage
26,592 13,767
41,887
General and administrative
186,582 93,732
250,526
Depreciation and
amortization
37,434 35,753
95,091
Reorganization expense
(income) and related costs
9,058 (25,967)
59,281
Debt renegotiation costs
-
- 2,857
-------------- ------------- ------------
584,972 313,635
975,131
-------------- ------------- ------------
Income from operations
42,810 50,804
27,807
Non-operating income (expense):
Interest income
2,151
836 1,105
Interest expense
(79,602) (85,678)
(225,119)
Interest expense - related
party
- (1,184)
(2,941)
Other non-operating income,
net
97
- 1,076
-------------- ------------- ------------
(77,354) (86,026)
(225,879)
-------------- ------------- ------------
Loss before income taxes,
discontinued operations,
extraordinary item and
minority interest
(34,544) (35,222)
(198,072)
Provision for income taxes
(11,421) (2,074)
(5,697)
Minority interest
9,631
- -
-------------- ------------- ------------
Loss from continuing
operations
(36,334) (37,296)
(203,769)
-------------- ------------- ------------
Income from discontinued
operations:
Trump Indiana
15,658 142,959
20,857
Provision for income taxes
(2,839) (24,211)
(21,858)
Minority interest
(3,013)
- -
-------------- ------------- ------------
Trump Indiana, net of
income taxes and minority
interest
9,806 118,748
(1,001)
Trump 29
-
- 7,480
Gain of termination of
Trump 29 management
contract
-
- 6,000
-------------- ------------- ------------
Income from discontinued
operations
9,806 118,748
12,479
-------------- ------------- ------------
(Loss) income before
extraordinary item
(26,528) 81,452
(191,290)
Extraordinary gain on
extinguishment of debt
- 196,932
-
-------------- ------------- ------------
Net (loss) income
$ (26,528) $ 278,384
$ (191,290)
============== ============= ============
Continuing operations
$ (1.19) $
(1.25) $ (6.82)
Discontinued operations
0.32 3.97
0.42
Extraordinary gain on
extinguishment of debt
- 6.59
-
-------------- ------------- ------------
Basic net (loss) income per
share
$ (0.87) $
9.31 $ (6.40)
============== ============= ============
Continuing operations
$ (1.19) $
(1.25) $ (6.82)
Discontinued operations
0.32 3.97
0.42
Extraordinary gain on
extinguishment of debt
- 6.59
-
-------------- ------------- ------------
Diluted net (loss) income
per share
$ (0.87) $
9.31 $ (6.40)
============== ============= ============
Weighted average shares
outstanding:
Basic
30,533,041 29,904,764 29,904,764
Diluted
30,533,041 29,904,764 29,904,764
TRUMP ENTERTAINMENT RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Reorganized Company Predecessor Company
---------------------------------------
Three Months Ended Three Months Ended
December 31, 2005 December 31, 2004
---------------------------------------
Revenues:
Gaming
$ 248,760 $
256,625
Rooms
18,251
18,691
Food and beverage
27,574
30,341
Other
7,963
9,648
------------------ -----------------
302,548
315,305
Less promotional allowances
(67,888) (78,580)
------------------ -----------------
Net revenues
234,660
236,725
Costs and expenses:
Gaming
118,761
121,444
Rooms
7,603
6,779
Food and beverage
9,476
10,068
General and administrative
75,494
66,298
Depreciation and amortization
15,175
23,290
Reorganization expense
(income) and related costs
1,387
59,281
------------------ -----------------
227,896
287,160
------------------ -----------------
Income (loss) from operations
6,764
(50,435)
Non-operating income (expense):
Interest income
1,235
514
Interest expense
(32,247) (57,209)
Other non-operating income, net
32
(404)
------------------ -----------------
(30,980) (57,099)
------------------ -----------------
Loss before income taxes,
discontinued operations,
extraordinary item and minority
interest
(24,216) (107,534)
Provision for income taxes
(8,375)
(1,383)
Minority interest
6,487
-
------------------ -----------------
Loss from continuing operations
(26,104) (108,917)
------------------ -----------------
Income from discontinued operations:
Trump Indiana
6,721
2,443
Provision for income taxes
(1,547)
(900)
Minority interest
(1,216)
-
------------------ -----------------
Trump Indiana, net of income
taxes and minority interest
3,958
1,543
Trump 29
-
1,583
Gain of termination of Trump
29 management contract
-
6,000
------------------ -----------------
Income from discontinued operations
3,958
9,126
------------------ -----------------
Net (loss) income
$ (22,146) $
(99,791)
================== =================
Continuing operations
$ (0.86)
$ (3.64)
Discontinued operations
0.13
0.30
------------------ -----------------
Basic net income per share
$ (0.73)
$ (3.34)
================== =================
Continuing operations
$ (0.86)
$ (3.64)
Discontinued operations
0.13
0.30
------------------ -----------------
Diluted net income per share
$ (0.73)
$ (3.34)
================== =================
Weighted average shares outstanding:
Basic
30,551,509 29,904,764
Diluted
30,551,509 29,904,764
TRUMP ENTERTAINMENT RESORTS, INC.
SELECTED FINANCIAL INFORMATION
SUMMARY OPERATING DATA
(In thousands)
Predecessor
and
Reorganized Predecessor Reorganized Predecessor
Company Company Company (1)
Company
-----------------------------------------------
Three Months Ended Year
Ended
December 31, 2005 December 31, 2005
-----------------------------------------------
2005 2004
2005 2004
------------ ---------- ----------- -----------
Gaming revenues:
Trump Taj Mahal
$ 126,603 $ 118,658 $ 512,741 $ 496,350
Trump Plaza
68,290 76,711 299,651
312,867
Trump Marina
53,867 61,256 249,157
260,246
---------- ---------- ----------- -----------
Total
$ 248,760 $ 256,625 $1,061,549 $1,069,463
========== ========== =========== ===========
Net revenues:
Trump Taj Mahal
$ 118,736 $ 110,328 $ 477,703 $ 470,030
Trump Plaza
62,661 68,789 273,391
284,763
Trump Marina
53,263 57,608 241,127
248,145
---------- ---------- ----------- -----------
Total
$ 234,660 $ 236,725 $ 992,221 $1,002,938
========== ========== =========== ===========
Income (loss) from
operations:
Trump Taj Mahal
$ 16,198 $ 7,495 $ 173,360 $
58,454
Trump Plaza
(1,197) (3,770) 32,232
15,610
Trump Marina
5,256 (6,214) (11,205)
17,669
Corporate & other
(13,493) (47,946) (100,773) (63,926)
---------- ---------- ----------- -----------
Total
$ 6,764 $ (50,435) $ 93,614 $
27,807
========== ========== =========== ===========
Depreciation and
amortization: (2)
Trump Taj Mahal
$ 8,319 $ 12,699 $ 38,552
$ 49,269
Trump Plaza
4,198 4,605
18,725 23,484
Trump Marina
2,614 5,950
15,738 22,256
Corporate & other
44 36
172 82
---------- ---------- ----------- -----------
Total
$ 15,175 $ 23,290 $ 73,187 $
95,091
========== ========== =========== ===========
Reorganization expense
(income) and related
expenses:
Trump Taj Mahal
$ - $ 2,697
$ (104,487) $ 2,697
Trump Plaza
16 1,795 (17,433)
1,795
Trump Marina
20 10,722 42,116
10,722
Corporate & other
1,351 44,067 62,895
44,067
---------- ---------- ----------- -----------
Total
$ 1,387 $ 59,281 $ (16,909) $
59,281
========== ========== =========== ===========
(1) For the purpose of selected financial information,
we have
combined the period from January 1,
2005 to May 19, 2005
(Predecessor Company) and the period
from May 20, 2005 to December
31, 2005 (Reorganized Company) into
the year ended December 31,
2005. This combination was performed,
as we believe it provides,
for the best comparison of our operating
performance for the
respective periods. Differences result
from the preparation of
financial statements and related information
of different bases of
accounting.
(2) Depreciation and amortization for the year ending
December 31,
2005 reflects an overall reduction
due to the writedown of
property and equipment to its appraised
value in conjunction with
our fresh-start accounting.
TRUMP ENTERTAINMENT RESORTS, INC.
SELECTED FINANCIAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBIDTA
(In millions)
Reorganized Predecessor
Company Company
------------------------
Three Months Ended
December 31, 2005
------------------------
2005 2004
---------- ----------
Income from operations
6.8 (50.4)
Depreciation and amortization
15.2 23.3
Reorganization expense and related costs
1.4 59.3
Development costs
1.1 0.8
Severance and management recruitment costs
3.0 -
Property tax reserve
- 8.0
---------- ----------
ADJUSTED EBITDA (1)
$ 27.5 $ 41.0
========== ==========
(1) "EBITDA" is defined as earnings before interest, taxes,
depreciation and amortization. We
calculate "Adjusted EBITDA" as
income from operations plus depreciation
and amortization,
reorganization expense and related
costs, development costs,
severance and management recruitment
costs, and property tax
reserve. EBITDA measures are presented
solely as a supplemental
disclosure because management believes
it is 1) a widely used
measure of operating performance in
the gaming industry, 2) a
principal basis for valuation of gaming
companies and 3) is used
as a basis for determining compliance
with our credit facility.
Adjusted EBITDA is presented solely
as a supplemental disclosure
because management believes it is
useful in understanding the lack
of comparability between the Predecessor
and Reorganized
companies.
Adjusted EBITDA should not be construed
as an alternative to GAAP-
based financial measures such as operating
income, an indicator of
our operating performance, or cash
flows from operating
activities, a measure of our liquidity.
We have significant uses
of cash flows, including capital expenditures,
interest payments,
taxes and debt principal repayments,
which are not reflected in
Adjusted EBITDA. |
About Our Company:
Trump Entertainment Resorts, Inc. is a leading gaming company that
owns and operates three properties. The Company's properties include Trump
Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, located on the
Boardwalk in Atlantic City, New Jersey, and Trump Marina Hotel Casino,
located in Atlantic City's Marina District. The Company is the sole vehicle
through which Donald J. Trump, the Company's Chairman and largest stockholder,
conducts gaming activities and strives to provide customers with outstanding
casino resort and entertainment experiences consistent with the Donald
J. Trump standard of excellence. Trump Entertainment Resorts, Inc. is separate
and distinct from Mr. Trump's real estate and other holdings.
PSLRA Safe Harbor for Forward-Looking Statements and Additional Available
Information
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results
to differ materially from those projected in such statements.
All statements, trend analysis and other information contained in this
release relative to the Company's or its subsidiaries' performance, trends
in the Company's or its subsidiaries' operations or financial results,
plans, expectations, estimates and beliefs, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend," "will," "could," "can" and other similar expressions, constitute
forward-looking statements under the Private Securities Litigation Reform
Act of 1995.
|
