News for the Hospitality Executive
Tropicana Entertainment Issues Preliminary Business Plan
Serve as a Basis for a Chapter 11 Plan of Reorganization
LAS VEGAS - November 10, 2008 - Tropicana Entertainment, LLC today posted to its website a summary of its preliminary business plan which would serve as a basis for a Chapter 11 plan of reorganization. The plan emphasizes internally funded operational improvements and high-priority capital investments.
“The summary is intended to give our constituents timely insight as to the performance of our properties as well our current thinking about what we need to do to capitalize on our widely recognized brand name and position Tropicana as the high quality, value priced competitor in our markets,” said Tropicana CEO Scott C. Butera.
Butera said that the plan addresses all of the properties in Tropicana’s equity portfolio without regard to the status of operational control or potential property sales. As such, he emphasized that the inclusion of the company’s New Jersey, Indiana and other properties is not meant to indicate the company’s position with respect to the dispositions of those assets.
The plan estimates that the 11 Tropicana properties will produce 2008
net revenue of $995 million and EBITDA of $129 million. The plan projects
$64 million in capital expenditures from internally generated cash, but
notes that performance improvements could accelerate if the company can
acquire additional capital resources to support its post-Chapter 11 business.
“Given the uncertain state of capital markets, our plan is focused on improvements that can be internally generated without reliance on outside funds,” Butera asserted. “Initially, our efforts will center on areas where there are immediate returns on investment ranging from improved slot products and property configurations to normalized labor practices, consolidated back room operations and enhanced restaurant menus and food quality.
“We will be emerging into one of the most difficult markets for gaming
and hospitality services ever experienced by the industry,” Butera said.
“The key for us will be to stabilize our revenue base and grow profits
through aggressive cost management; strategic investments in products,
services and facilities; targeted customer development and retention programs;
and a more motivated and service-driven staff.
Forward Looking Statements
As noted above, the estimates contained in the press release
include the Tropicana Atlanta City. Prior to December 12, 2007, Tropicana
controlled Adamar of New Jersey, Inc. (“Adamar”), which owns the principal
assets making up the Tropicana Atlantic City. However, on December 12,
2007, the New Jersey Casino Control Commission (the “NJ Commission”) denied
Adamar’s application for plenary authorization as a casino holding company
and declined to renew its existing casino license. Because it denied Tropicana’s
application for plenary authorization, the NJ Commission rendered operative
an interim casino authorization trust ("ICA Trust") formed in October 2006
to hold the capital stock of Adamar. Upon the ICA Trust becoming operative,
a previously appointed trustee under the ICA Trust, former New Jersey State
Supreme Court Justice Gary S. Stein, was empowered to manage the operations
of the Tropicana Atlantic City.
Forward-looking statements are inherently uncertain, particularly in light of the current worldwide financial and credit crisis, and potential or current creditors and investors must recognize that actual results will differ from those expressed or implied in the press release and the forward-looking statements contained therein. Consequently, no representations or warranties are made as to the accuracy or reasonableness of the estimates set forth in the press release or management’s assumptions regarding the business and its future results and operations. The company expressly cautions readers not to place undue reliance on the estimates set forth in the press release and any forward-looking statements contained therein.
Among the factors that could cause Tropicana’s actual results to differ from those set forth in the press release include, but are not limited to, risks associated with operating as a debtor-in-possession in bankruptcy, the company’s inability to regain control of Tropicana Atlantic City, the sale or disposition of one or more of the company’s gaming properties, competition in the casino/hotel and resorts industries, the company’s dependence on existing management, levels of travel, leisure and casino spending and changes in gaming laws or regulations. In addition, the company’s results may also be affected by general factors, such as economic conditions, political developments, interest and inflation rates, accounting standards, taxes and laws and regulations in markets where the company competes. A further list and description of risks, uncertainties, and other matters can be found in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The company is under no obligation, and expressly disclaims any obligation, to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
About Tropicana Entertainment, LLC
|Also See:||Tropicana Entertainment Files for Chapter 11 Protection Following Fallout from Atlantic City Casino Loss; Expects to Maintain Current Staffing Levels at Nine Casino and Resort Properties / May 2008|
|Tropicana Provides Update on Atlantic City License; Company intends to repay senior debt with proceeds of potential sale of its Tropicana Atlantic City property / December 2007|