Rose to $22.8 million from $4.2 million a Year-earlier;
22% Increase in RevPAR for Las Vegas Strip Hotels
|LAS VEGAS, March 4, 2004 - Mandalay Resort Group
(NYSE: MBG) today announced results for its fourth quarter and fiscal year
ended January 31, 2004. For the fourth quarter, the company reported net
income of $22.8 million, or $.35 per diluted share, compared with $4.2
million, or $.06 per diluted share, in the prior year. For the fiscal year,
the company reported net income of $149.8 million, or $2.31 per diluted
share, compared with $115.6 million, or $1.65 per diluted share, in the
Results in the current year quarter include preopening expenses of $3.9 million ($.04 per diluted share) related primarily to THEhotel, the new 1,117-all-suite tower which opened at Mandalay Bay on December 17. Results for the quarter also include a gain of $3.8 million ($.04 per diluted share) representing the quarterly adjustment of the carrying value of investments associated with the company's executive retirement plan.
Results for the prior-year fourth quarter included the write-off of $5.4 million ($.08 per diluted share) of goodwill related to the Edgewater Hotel and Casino, preopening expenses of $1.3 million ($.01 per diluted share) related to the new convention center at Mandalay Bay that opened in January 2003, and a gain of $0.5 million representing the quarterly adjustment to the carrying value of the retirement plan investments.
Average diluted shares outstanding in the quarter were 66.1 million versus 67.2 million in the prior year. This reflects the company's repurchase of 3.3 million shares pursuant to the March 2003 settlement of its equity forward agreement, partially offset by the issuance of shares pursuant to the exercise of employee stock options. Total shares outstanding (excluding any dilutive effect from outstanding stock options) were 65.4 million at January 31, 2004, compared with 62.6 million at January 31, 2003.
Mandalay's operating cash flow (which is not a defined term under Generally Accepted Accounting PrinciplesBsee Note 1 below) was $136.7 million and $648.1 million for the fourth quarter and fiscal year ended January 31, 2004, compared with $120.0 million and $625.8 million in the comparable prior year periods. The financial schedules accompanying this release provide a reconciliation of operating cash flow to net income as required by the Securities and Exchange Commission's Regulation G.
LAS VEGAS STRIP
Operating cash flow at the company's Las Vegas Strip properties (including the 50%-owned Monte Carlo) increased 25% in the fourth quarter compared to the prior year, driven by a 22% increase in revenue per available room ("REVPAR"). Each property reported double-digit increases in REVPAR and, with the exception of Monte Carlo, operating cash flow at each property increased more than 20% during the quarter.
Mandalay Bay, the company's flagship resort, generated operating cash flow of $36.7 million in the fourth quarter, compared with $29.7 million last year. REVPAR rose 26%, as the average room rate topped $192 with 76% occupancy. This compares to an average room rate of $181 and 64% occupancy in the previous year. "The relative strength of the convention market is evident in Mandalay Bay's rising results," noted Glenn Schaeffer, the company=s President and Chief Financial Officer. "With THEhotel, we expect to significantly increase our returns from this lucrative segment. Meanwhile, the balance of our portfolio in Las Vegas distinctly outperformed the market in the fourth quarter in terms of REVPAR."
Luxor produced operating cash flow of $28.1 million compared with $22.6 million in last year's fourth quarter. REVPAR at this property increased 18%, with an average room rate of $111 compared with $101 last year. Meanwhile, for the second consecutive quarter, Excalibur posted the largest percentage increase in operating cash flow among the company's Las Vegas Strip properties, up 35% to $20.9 million. Strong performances in the hotel and casino again contributed to these results, as REVPAR rose 20% and casino revenues increased 15%. At Circus-Circus, operating cash flow was $12.7 million in the fourth quarter, up 32% from the prior year. REVPAR at this property increased 12% compared to a year ago. For its part, Monte Carlo (50%-owned by Mandalay) reported a 5% increase in operating cash flow, to $20.3 million from $19.3 million, with REVPAR rising 16%.
OTHER NEVADA MARKETS
On a combined basis, operating cash flow declined in the fourth quarter at the company's other Nevada properties (in Reno, Laughlin, Jean and Henderson). Results at these properties reflect the continuing effects of expanded Native American gaming in California. Operating cash flow from these properties represented approximately 3% of the company's total operating cash flow in the fourth quarter and 7% in the fiscal year. Please refer to the financial schedules accompanying this release.
In Elgin, Illinois, operating cash flow at the 50%-owned Grand Victoria was $14.6 million in the fourth quarter, down 41% from $24.7 million in the prior year quarter. The decrease was attributable to higher gaming taxes which took effect July 1, 2003 and raised the top-end rate to 70% on gaming revenues exceeding $250 million. This tax increase impacted Mandalay's earnings by approximately $.05 per diluted share in the fourth quarter.
In Detroit, Michigan, MotorCity produced operating cash flow of $34.2 million, up 23% from $27.9 million in the previous year. The Detroit market strengthened in the latter part of the year, as MotorCity exhibited a 6% rise in casino revenues during the quarter. In Tunica County, Mississippi, operating cash flow at the company's Gold Strike Resort increased 57% to $7.5 million from $4.8 million last year, as casino revenues grew 16%.
On February 2, 2004, the company paid a quarterly dividend of $.27 per
share to shareholders of record January 15. On March 3, 2004, the company's
Board of Directors declared a dividend of $.27 per share payable May 3,
2004 to shareholders of record April 16, 2004.
This press release contains forward-looking statements within the meaning of the federal securities law, including statements concerning the expected impact of THEhotel.
Mandalay Resort Group
|Also See:||Mandalay Bay's Convention Center Investment Money Well Spent / May 2003|
|Mandalay Resort Group Reports Revised Development Agreement with the City of Detroit Has Been Approved by the Detroit City Council; Includes 400-room Hotel, Expanded Casino / Aug 2002|