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LAS VEGAS, Aug. 3, 1998 - The Bellagio room reservations office opened
on April 20 and recently completed its first 100 days of accepting reservations.
During this period and despite the lack of any advertising, over twice
as many reservations have been placed for Bellagio as was the case over
the comparable preopening time periods for the Company's Mirage and Treasure
Island resorts. The average rate for rooms and suites booked through this
office to date is $258 per night. While this number does not include convention
and wholesale bookings and the ultimate average rate may differ, both the
volume and the pricing of room reservations to date substantially exceed
the Company's expectations.
Meanwhile, the Company's second quarter was affected by a lower-than- historical table games win percentage, affecting earnings by approximately $0.04 to $0.05 per share; a 13% decline in baccarat activity, accounting for $0.01 per share; higher staffing and training costs related to Bellagio, accounting for another $0.01 per share; and the temporary injury of one of the principal performers in the Siegfried Roy production, affecting earnings by yet another $0.01 per share. Despite these factors, the Company earned $33.6 million in net income in the quarter, or $0.18 per share, versus $48.9 million, or $0.25 per share, in the prior-year period. The Details The table games win percentage in the quarter was 16.8%, versus 20.1% in the prior-year quarter. The Company's win percentage over the past three calendar years has averaged 20.3%. Management estimates that the differential between a 20.3% and a 16.8% win percentage in a quarterly period equates to approximately $0.04 to $0.05 per share. The win percentage is affected by several factors, including luck and customers' playing habits. The 13% decline in baccarat activity during the quarter, assuming a normal baccarat win percentage and appropriate profit margin, equates to approximately another $0.01 per share. Such decline relates to the highly publicized economic difficulties in certain Far Eastern economies, whose profit implications to the Company, in management's judgment, are often overrated. The other components of the Company's gaming activity have generally equaled or exceeded historical levels. In July, for example, The Mirage had the highest monthly slot win in its history. The Company's Bellagio and Beau Rivage projects are on schedule to open October 15 and February 1, respectively. The Company opened its Las Vegas employment center on April 6 and its Biloxi employment center on July 20. To date, the Las Vegas employment office has processed over 56,000 applications and interviewed approximately 27,000 individuals. Over 3,000 of the Company's existing employees have requested and been accepted for transfer to Bellagio. The remaining approximately 5,500 Bellagio employees, plus the replacements for people being transferred from the Company's existing hotels, are being hired through the Las Vegas employment center. In total, the Company's staffing will increase dramatically over the next several months, from approximately 17,000 to 30,000. This massive effort has resulted in the Company's existing facilities maintaining higher staffing levels and incurring greater training costs than would ordinarily be the case, affecting the quarter by approximately $0.01 per share. The results for The Mirage and Treasure Island include gains of $2.6 million each related to the sale of 16 acres of land to the owner of the adjacent Fashion Show Mall. This land was previously used by both hotel- casinos for employee parking. To facilitate the land sale, in March the Company completed an 1,800-space, $12 million employee parking garage behind The Mirage and Treasure Island that is considerably more convenient for the Company's employees. Furthermore, the Fashion Show Mall intends to use the acquired land for a significant expansion which should prove beneficial to the Company's neighboring hotel-casinos. During the quarter, Mirage Resorts (NYSE: MIR) also acquired Boardwalk Casino, Inc., completing the assemblage of a 42-acre site for a potential future hotel-casino located between Bellagio and Monte Carlo along the Las Vegas Strip. Corporate expense rose slightly in the quarter when compared to historical results and interest cost approximately doubled over the prior-year quarter, as the Company prepares for the opening of the new facilities. The additional interest cost was largely capitalized, as the increase in debt was caused by the Company's ongoing construction projects. In Atlantic City, New Jersey, the Company recently completed construction of the preopening offices for its planned facility on the H-Tract in the City's Marina district. Construction is expected to begin in October on extensive highway improvements necessary for development of the H-Tract. Mirage Resorts recently contracted with Tishman Construction Corporation of New Jersey to be the construction manager of its wholly owned resort and intends to begin clearing the site shortly. In July, the Company also entered into a revised agreement for a joint venture hotel-casino on the H-Tract with Boyd Gaming Corporation. The construction of the joint venture hotel-casino is expected to begin by the fall of 1999. Forward-Looking Statements This press release contains forward-looking statements which are subject to change. Actual results may differ materially from those described in any forward-looking statement. Additional information concerning potential factors that could affect the Company's future financial results are included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. |
Mirage Resorts, Inc. | ||||||
Interpretive Data | ||||||
For the periods ended June, 30 | ||||||
(Dollars in thousands, except room rate amounts) | ||||||
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Six Months |
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Gross Revenue | ||||||
The Mirage |
$ 181,618
|
$ 202,159
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$ 384,622
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$ 419,161
|
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Treasure Island |
$ 100,604
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$ 97,890
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$ 201,172
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$ 199,204
|
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Golden Nugget |
$ 50,397
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$ 49,801
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$ 101,716
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$ 102,578
|
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Golden Nugget - Laughlin |
$ 14,191
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$ 15,155
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$ 29,793
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$ 31,053
|
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Equity in earnings of Monte Carlo |
$ 7,347
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$ 8,752
|
$ 14,786
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$ 16,160
|
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Less Promotional allowances |
$ (31,222)
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$ (29,396)
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$ (66,550)
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$ (61,756)
|
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Net Revenues |
$ 322,935
|
$ 344,361
|
$ 665,539
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$ 706,400
|
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Operating Cash Flow (EBDIT) | ||||||
The Mirage |
$ 38,851
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$ 56,781
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$ 90,855
|
$ 125,246
|
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Treasure Island |
$ 26,358
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$ 27,035
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$ 50,949
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$ 56,904
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Golden Nugget |
$ 10,360
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$ 10,354
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$ 20,651
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$ 22,101
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Golden Nugget - Laughlin |
$ 1,727
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$ 2,636
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$ 4,379
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$ 5,852
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$ 77,296
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$ 96,806
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$ 166,834
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$ 210,103
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Operating Income | ||||||
The Mirage |
$ 28,529
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$ 47,116
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$ 70,284
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$ 106,252
|
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Treasure Island |
$ 18,677
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$ 19,670
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$ 35,496
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$ 42,199
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Golden Nugget |
$ 6,876
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$ 6,545
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$ 13,631
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$ 14,814
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Golden Nugget - Laughlin |
$ 742
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$ 1,457
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$ 2,367
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$ 3,464
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$ 54,824
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$ 74,788
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$ 121,778
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$ 166,729
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Equity in earnings of Monte Carlo |
$ 7,347
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$ 8,752
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$ 14,786
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$ 16,160
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Corporate Expense |
$ (9,607)
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$ (6,703)
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$ (18,092)
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$ (15,315)
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$ 52,564
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$ 76,837
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$ 118,472
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$ 167,574
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Monte Carlo Operating Information (100%) | ||||||
Gross Revenue |
$ 67,633
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$ 66,977
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$ 134,985
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$ 133,261
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Operating Cash Flow (EBIT) |
$ 21,687
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$ 24,387
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$ 43,695
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$ 48,004
|
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Operating Income |
$ 16,174
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$ 19,262
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$ 32,681
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$ 37,794
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Other Information (excluding Monte Carlo) | ||||||
Company Wide Table Games Win Percentage |
16.80%
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20.10%
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18.40%
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20.00%
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Company Wide Occupancy of Standard Guest Rooms |
99.30%
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99.00%
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98.70%
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99.20%
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Average Standard Guest Room Rate (cash rate at the company's Las Vegas hotels |
$ 92
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$ 95
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$ 91
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$ 94
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Source: Mirage Resorts, Inc. |
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Also See: | Mirage Resorts Reports First Quarter, 1998 Earnings / May 1998 |
Beau Rivage; Glimpse of the Future for Biloxi, MS / May 1998 | |
U.S. Gaming Revenue Growth to Drop by More Than 5O Percent This Year, Bear Stearns / April 1998 |