NYNY Empire Resorts Inc

Empire Resorts, Inc. (NASDAQ: NYNY) today reported financial results for the third quarter and nine months ended September 30, 2006. Net revenue for the third quarter was a record $28.7 million, up 12.0% from the $25.6 million reported in the third quarter of 2005. Revenue from racing increased by approximately $0.5 million, or 11.8%, reflecting simulcasting of races to a greater number of facilities, while revenue from the company�s video gaming machine (VGM) business rose by approximately $2.5 million, or 12.2%. Revenue from the sale of food, beverages and other services also increased � by approximately $0.6 million, or 36.5%. Empire�s VGM operations experienced an uptick in daily visits of roughly 1%, and the daily win per unit rose to $159.70 for the quarter from $123.17 in the third quarter of 2005. Total operating costs and expenses rose by $1.5 million, or 5.8%, for the quarter versus 2005, reflecting the rise in revenue. The company posted operating income of $1.9 million this quarter, versus $0.3 million in the prior-year period. EBITDA improved to $2.1 million from $0.6 million in the third quarter of 2005. The company posted a net loss for the third quarter of $(0.2) million, or $(0.01) per diluted share, compared with a net loss of $(1.6) million, or $(0.06) per diluted share, in 2005. For the first nine months of fiscal 2006, Empire reported net revenue of $77.3 million versus $64.3 million in the same period last year. EBITDA was $3.8 million for the three quarters of 2006, as compared to $(2.2) million in 2005. Empire�s net loss for the period was $(3.2) million, or $(0.12) per diluted share, versus a net loss of $(8.0) million, or $(0.31) per diluted share, last year. �Once again, we are pleased with the performance of our existing gaming and racing operations in Monticello, even as we make final preparations for bringing a St. Regis Mohawk casino to the Catskills,� commented David Hanlon, CEO and president. �We continue to wait patiently for the Bureau of Indian Affairs to complete its review in regards to issuing a Finding of No Significant Impact, or FONSI, after which the federal government can begin the process of transferring our land into trust for the Tribe. We are putting the finishing touches on the engineering plans and architectural drawings for a truly world-class casino that will create 11,000 new jobs and finally place New York in a competitive position with contiguous and expanding gaming operations that now benefit New Jersey, Connecticut, and Pennsylvania. �We transformed Monticello into a regional entertainment venue in 2004 with the opening of our VGM operations, and we now stand on the verge of creating one of New York�s leading resort destinations. Empire Resorts and the St. Regis Mohawks are poised to lead an economic renaissance in the Catskills. Clearly � with this significant recent development � it now looks as though, finally, it�s New York�s turn to win big.� The company makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure which it believes is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles, or "GAAP," and should not be considered as an alternative to net income/(loss) or net cash provided by operating activities, which are GAAP measures. A reconciliation of EBITDA to net income/(loss) appears at the end of this release, as do both actual results for the quarter and year-to-date periods. About Empire Resorts, Inc. Empire Resorts operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire�s Mighty M Gaming facility now features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. Additional information can be found at www.empireresorts.com. Statements in this press release regarding the company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties, including the need for regulatory approvals, financing and successful completion of construction. The company wishes to caution readers not to place undue reliance on such forward-looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1994, and as such, speak only as of the date made. To the extent the content of this press release includes forward-looking statements, they involve various risks and uncertainties including (i) the risk that the various approvals necessary as described herein and other approvals required to be obtained from the United States Congress, the Bureau of Indian Affairs, the National Indian Gaming Regulatory Commission, the Governor of the State of New York and various other federal, State and local governmental entities are not received, (ii) the risk that financing necessary for the proposed programs or projects may not be able to be obtained because of credit factors, market conditions or other contingencies, (iii) the risk that sovereign Native American governments may exercise certain broad rights with regard to termination of its agreements with the company (iv) the risk of non-compliance by various counterparties of the related agreements, and (v) general risks affecting the company as described from time to time in it's reports filed with the Securities and Exchange Commission. For a full discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the company's Annual Report or Form 10-K for the most recently ended fiscal year. EMPIRE RESORTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) � Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2006� 2005� 2006� 2005� Net Revenues $ 28,721� $ 25,648� $ 77,264� $ 64,291� � Operating Costs 22,421� 20,166� 62,232� 54,168� Selling, General & Administrative 4,160� 4,885� 11,184� 9,988� Impairment Loss - Deferred Development Costs 45� 2,363� Depreciation � 287� � 282� � 856� � 839� Total Costs & Expenses � 26,868� � 25,378� � 74,272� � 67,358� � Income (Loss) From Operations 1,853� 270� 2,992� (3,067) � Amortization of Deferred Financing Costs 170� 146� 486� 429� Interest � 1,492� � 1,318� � 4,497� � 3,314� � Net (Loss) 191� (1,194) (1,991) (6,810) � Cumulative Undeclared Dividends on Preferred Stock � 388� � 388� � 1,164� � 1,164� � Net Loss Applicable to Common Shareholders $ (197) $ (1,582) $ (3,155) $ (7,974) Weighted Average Common Shares Outstanding 26,835� 26,147� 26,604� 26,111� � Loss Per Common Share $ (0.01) $ (0.06) $ (0.12) $ (0.31) � � Reconciliation of Net Loss to EBITDA � Net Income (Loss) $ 191� $ (1,194) $ (1,991) $ (6,810) Add: Depreciation 287� 282� 856� 839� Add: Amortization of Deferred Financing Costs 170� 146� 486� 429� Add: Provision for Income Taxes -� -� -� -� Add: Interest � 1,492� � 1,318� � 4,497� � 3,314� � EBITDA $ 2,140� $ 552� $ 3,848� $ (2,228) EMPIRE RESORTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) � September 30, December 31, 2006� 2005� (Unaudited) (Audited) Assets Current Assets: Cash and Cash Equivalents $ 9,289� $ 6,992� Restricted Cash 3,408� 4,716� Accounts Receivable 4,451� 3,358� Prepaid Expenses and Other Current Assets � 1,738� � 1,112� Total Current Assets 18,886� 16,178� � Property and Equipment - Net 31,849� 32,536� Deferred Financing Costs - Net 3,286� 2,973� Deferred Development Costs � 6,817� � 5,558� � Total Assets $ 60,838� $ 57,245� � � Liabilities and Stockholders' Deficit Current Liabilities: Accounts Payable $ 3,409� $ 3,529� Revolving Credit Facility 7,617� 7,476� Accrued Expenses and Other Current Liabilities � 9,822� � 8,455� Total Current Liabilities 20,848� 19,460� � Senior Convertible Notes � 65,000� � 65,000� � Total Liabilities 85,848� 84,460� � Stockholders' Deficit � (25,010) � (27,215) � Total Liabilities and Stockholders' Deficit $ 60,838� $ 57,245� Empire Resorts, Inc. (NASDAQ: NYNY) today reported financial results for the third quarter and nine months ended September 30, 2006. Net revenue for the third quarter was a record $28.7 million, up 12.0% from the $25.6 million reported in the third quarter of 2005. Revenue from racing increased by approximately $0.5 million, or 11.8%, reflecting simulcasting of races to a greater number of facilities, while revenue from the company's video gaming machine (VGM) business rose by approximately $2.5 million, or 12.2%. Revenue from the sale of food, beverages and other services also increased - by approximately $0.6 million, or 36.5%. Empire's VGM operations experienced an uptick in daily visits of roughly 1%, and the daily win per unit rose to $159.70 for the quarter from $123.17 in the third quarter of 2005. Total operating costs and expenses rose by $1.5 million, or 5.8%, for the quarter versus 2005, reflecting the rise in revenue. The company posted operating income of $1.9 million this quarter, versus $0.3 million in the prior-year period. EBITDA improved to $2.1 million from $0.6 million in the third quarter of 2005. The company posted a net loss for the third quarter of $(0.2) million, or $(0.01) per diluted share, compared with a net loss of $(1.6) million, or $(0.06) per diluted share, in 2005. For the first nine months of fiscal 2006, Empire reported net revenue of $77.3 million versus $64.3 million in the same period last year. EBITDA was $3.8 million for the three quarters of 2006, as compared to $(2.2) million in 2005. Empire's net loss for the period was $(3.2) million, or $(0.12) per diluted share, versus a net loss of $(8.0) million, or $(0.31) per diluted share, last year. "Once again, we are pleased with the performance of our existing gaming and racing operations in Monticello, even as we make final preparations for bringing a St. Regis Mohawk casino to the Catskills," commented David Hanlon, CEO and president. "We continue to wait patiently for the Bureau of Indian Affairs to complete its review in regards to issuing a Finding of No Significant Impact, or FONSI, after which the federal government can begin the process of transferring our land into trust for the Tribe. We are putting the finishing touches on the engineering plans and architectural drawings for a truly world-class casino that will create 11,000 new jobs and finally place New York in a competitive position with contiguous and expanding gaming operations that now benefit New Jersey, Connecticut, and Pennsylvania. "We transformed Monticello into a regional entertainment venue in 2004 with the opening of our VGM operations, and we now stand on the verge of creating one of New York's leading resort destinations. Empire Resorts and the St. Regis Mohawks are poised to lead an economic renaissance in the Catskills. Clearly - with this significant recent development - it now looks as though, finally, it's New York's turn to win big." The company makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure which it believes is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles, or "GAAP," and should not be considered as an alternative to net income/(loss) or net cash provided by operating activities, which are GAAP measures. A reconciliation of EBITDA to net income/(loss) appears at the end of this release, as do both actual results for the quarter and year-to-date periods. About Empire Resorts, Inc. Empire Resorts operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Mighty M Gaming facility now features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. Additional information can be found at www.empireresorts.com. Statements in this press release regarding the company's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties, including the need for regulatory approvals, financing and successful completion of construction. The company wishes to caution readers not to place undue reliance on such forward-looking statements, which statements are made pursuant to the Private Securities Litigation Reform Act of 1994, and as such, speak only as of the date made. To the extent the content of this press release includes forward-looking statements, they involve various risks and uncertainties including (i) the risk that the various approvals necessary as described herein and other approvals required to be obtained from the United States Congress, the Bureau of Indian Affairs, the National Indian Gaming Regulatory Commission, the Governor of the State of New York and various other federal, State and local governmental entities are not received, (ii) the risk that financing necessary for the proposed programs or projects may not be able to be obtained because of credit factors, market conditions or other contingencies, (iii) the risk that sovereign Native American governments may exercise certain broad rights with regard to termination of its agreements with the company (iv) the risk of non-compliance by various counterparties of the related agreements, and (v) general risks affecting the company as described from time to time in it's reports filed with the Securities and Exchange Commission. For a full discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the company's Annual Report or Form 10-K for the most recently ended fiscal year. -0- *T EMPIRE RESORTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2006 2005 2006 2005 --------- --------- -------- -------- Net Revenues $28,721 $25,648 $77,264 $64,291 Operating Costs 22,421 20,166 62,232 54,168 Selling, General & Administrative 4,160 4,885 11,184 9,988 Impairment Loss - Deferred Development Costs 45 2,363 Depreciation 287 282 856 839 ----------------------------- --------- --------- -------- -------- Total Costs & Expenses 26,868 25,378 74,272 67,358 ----------------------------- --------- --------- -------- -------- Income (Loss) From Operations 1,853 270 2,992 (3,067) Amortization of Deferred Financing Costs 170 146 486 429 Interest 1,492 1,318 4,497 3,314 ----------------------------- --------- --------- -------- -------- Net (Loss) 191 (1,194) (1,991) (6,810) Cumulative Undeclared Dividends on Preferred Stock 388 388 1,164 1,164 ----------------------------- --------- --------- -------- -------- Net Loss Applicable to Common Shareholders $ (197) $(1,582) $(3,155) $(7,974) ============================= ========= ========= ======== ======== Weighted Average Common Shares Outstanding 26,835 26,147 26,604 26,111 Loss Per Common Share $ (0.01) $ (0.06) $ (0.12) $ (0.31) ============================= ========= ========= ======== ======== Reconciliation of Net Loss to EBITDA Net Income (Loss) $ 191 $(1,194) $(1,991) $(6,810) Add: Depreciation 287 282 856 839 Add: Amortization of Deferred Financing Costs 170 146 486 429 Add: Provision for Income Taxes - - - - Add: Interest 1,492 1,318 4,497 3,314 ----------------------------- --------- --------- -------- -------- EBITDA $ 2,140 $ 552 $ 3,848 $(2,228) ============================= ========= ========= ======== ======== *T -0- *T EMPIRE RESORTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2006 2005 (Unaudited) (Audited) ------------- ------------ Assets Current Assets: Cash and Cash Equivalents $ 9,289 $ 6,992 Restricted Cash 3,408 4,716 Accounts Receivable 4,451 3,358 Prepaid Expenses and Other Current Assets 1,738 1,112 ---------------------------------------- ------------- ------------ Total Current Assets 18,886 16,178 Property and Equipment - Net 31,849 32,536 Deferred Financing Costs - Net 3,286 2,973 Deferred Development Costs 6,817 5,558 ---------------------------------------- ------------- ------------ Total Assets $ 60,838 $ 57,245 ======================================== ============= ============ Liabilities and Stockholders' Deficit Current Liabilities: Accounts Payable $ 3,409 $ 3,529 Revolving Credit Facility 7,617 7,476 Accrued Expenses and Other Current Liabilities 9,822 8,455 ---------------------------------------- ------------- ------------ Total Current Liabilities 20,848 19,460 Senior Convertible Notes 65,000 65,000 ---------------------------------------- ------------- ------------ Total Liabilities 85,848 84,460 Stockholders' Deficit (25,010) (27,215) ---------------------------------------- ------------- ------------ Total Liabilities and Stockholders' Deficit $ 60,838 $ 57,245 ======================================== ============= ============ *T