MOHEGAN SUN NUMBERS FOR THE LAST QUARTER

Mohegan Sun reports jump in income
Gains linked to cost cutting, not increases in gambling.
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By William Sokolic
Norwich Bulletin
Posted Aug 05, 2009 @ 11:25 PM

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.Contradiction is what Mohegan Sun CEO Mitchell Etess termed the casino’s third quarter results.

Gaming revenues declined. Food and beverage and hotel revenues dropped. The number of events at the arena decreased, as did ticket sales.

Yet the casino’s income from operations increased by 58 percent, said Leo Chupaska, Mohegan Sun’s chief financial officer.

And table game hold grew.

“We are pleased with our results from corporate, despite experiencing declining revenues,” Etess said. “Much of our improved performance is attributable to a more normalized table games hold as compared to the third quarter of last year, as well as continued cost savings.”

But income from operations was affected by declines in slot and nongaming revenues.

Slot and nongaming revenues were affected by competition. The gross slot win per unit per day fell to $319, in part because some customers in markets in New York City and Boston chose to frequent closer locales in New York and Rhode Island.

“Revenues continue to be a challenge,” Etess said. “We had the lowest quarter slot revenues since 2002. We also had large declines in higher-end table play customers.”

A $3.7 million decline in food revenues resulted from a 22.1 percent reduction in the number of meals served at Mohegan Sun-owned food outlets. Revenues were negatively affected by the September 2008 opening of Jimmy Buffett’s Margaritaville Restaurant, a third-party outlet.

The drop in hotel revenues is the result of falling demand for business travel as corporations trim their travel spending. The average daily room rate decreased to $92 for the quarter, compared to $114 in the third quarter of fiscal year 2008.

“The daily rate is impacted by lower rates at Foxwoods and Atlantic City. Fiscal 2009 and 2010 will be a challenge for group business,” said Jeffrey E. Hartmann, executive vice president of the Mohegan Tribal Gaming Authority.

Hotel revenues also were affected by a decrease in Mohegan Sun’s entertainment offerings. During the quarter, there was a significant decrease in the number of scheduled shows at the Mohegan Sun Arena, including fewer headliner shows. That resulted in a 37.9 percent decrease in tickets sales.

Looking forward, Etess said he is excited about the recent re-opening of the Winter Entrance, along with new dining outlets, including Bobby’s Burger Palace and Pepe’s Pizza.

By the numbers Financial results for the third quarter ended June 30 (in thousands, unaudited):

Adjusted EBITDA* $72,902 $55,995 $16,907 30.2%

Income from operations $54,536 $34,547 $19,989 57.9%

Operating costs and expenses $252,712 $292,350 -$39,638 -13.6%

Net revenues $307,248 $326,897 -$19,649 -6%

Gaming revenues $273,474 $282,356 -$8,882 -3.1%

Nongaming revenues $61,112 $77,710 -$16,598 -21.4%

*Earnings before interest, taxes, depreciation and amortization

EDITORIAL FOOTNOTE: The numbers really say that Mohegan Sun had about $19 Million to bring over to the Mohegan Tribal Government, doesn't the Tribal Government need at least $20 Million brought over? On the Mohegan Sun at Pocono Downs it shows about $10 Million, however there is at least $10 Million needed to pay out in interest, so in my opinion, we didn't make any money there either. It looks good on paper, but in reality it is terrible. In my opinion, those are the facts. What do you think?

Check out the real story at www.feathernews.blogspot.com.