AI Signal: Sign In to See #Financial Data PROVIDENCE, R.I., Aug. 4, 2022 /PRNewswire/ — Bally’s Corporation (NYSE: BALY) today reported financial results for the second quarter ended June 30, 2022. Second Quarter 2022 Financial Highlights Revenue of $552.5 million Net income of $59.5 million Adjusted EBITDA of $141.2 million Lee Fenton, Chief Executive Officer said, “Our second quarter results reflect continued strength in our Casinos & Resorts segment, record margins in our International Interactive segment and continued growth in our North America Interactive segment particularly in BallyCasino.com in New Jersey, despite headwinds from significant FX volatility and challenges in Atlantic City. We are pleased with the Company’s record cash flow from operations in the quarter and are focused on continued incremental cash flow generation initiatives.” Summary of Financial Results Three Months Ended June 30, (in thousands, except percentages) 2022 2021 Revenue $ 552,496 $ 267,733 Net income $ 59,501 $ 68,942 Net income margin 10.8 % 25.8 % Adjusted EBITDA(1) $ 141,224 $ 82,825 Adjusted EBITDA margin(1) 25.6 % 30.9 % (1) Refer to tables in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable measure calculated in accordance with GAAP. 2022 Guidance Bally’s is updating its previous guidance provided on February 24, 2022 for the year ending December 31, 2022 with revenue in the range of $2.2 billion to $2.3 billion and Adjusted EBITDA in the range of $535 million to $550 million reflecting six months of results, adverse foreign exchange movements and lower expectations for our Atlantic City property. The guidance is subject to a number of known and unknown uncertainties and risks, including those set forth under Bally’s safe-harbor statement under the federal securities laws set forth below. Capital Return Program On July 27, 2022, the Company completed its tender offer and repurchased 4.7 million shares of its common stock for cash at a price of $22.00 per share for an aggregate purchase price of $103.3 million. Bally’s currently has $334.6 million available for use under its previously announced capital return program. Reconciliation of GAAP Measures to Non-GAAP Measures To supplement the financial information presented on a generally accepted accounting principles (“GAAP”) basis, the Company has included in this earnings release non-GAAP financial measures for Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDAR and Adjusted EBITDAR margin, which exclude certain items described below. The reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below. “Adjusted EBITDA” is earnings, or loss, for the Company, or where noted the Company’s reportable segments, before, in each case, interest expense, net of interest income, provision (benefit) for income taxes, depreciation and amortization, non-operating (income) expense, acquisition, integration and restructuring expenses, share-based compensation, and certain other gains or losses as well as, when presented for the Company’s reporting segments, an adjustment related to the allocation of corporate costs among segments. Adjusted EBITDA margin is measured as Adjusted EBITDA as a percentage of revenue. “Adjusted EBITDAR” is Adjusted EBITDA (as defined above) for the Company’s Casinos & Resorts segment plus rent expense associated with triple net operating leases. Adjusted EBITDAR margin is measured as Adjusted EBITDAR as a percentage of revenue. Management has historically used Adjusted EBITDA and Adjusted EBITDA margin when evaluating operating performance because the Company believes that these metrics are necessary to provide a full understanding of the Company’s core operating results and as a means to evaluate period-to-period performance. Management also believes that Adjusted EBITDA is a measure that is widely used for evaluating operating performance of companies in the Company’s industry and a principal basis for valuing such companies as well. Adjusted EBITDAR and Adjusted EBITDAR margin are used outside of our financial statements solely as valuation metrics. Management believes Adjusted EBITDAR and Adjusted EBITDAR margin are additional metrics traditionally used by analysts in valuing gaming companies subject to triple net leases since it eliminates the effects of variability in leasing methods and capital structures. Neither Adjusted EBITDA or Adjusted EBITDAR should be construed as an alternative to GAAP net income as an indicator of the Company’s performance. In addition, Adjusted EBITDA or Adjusted EBITDAR as used by the Company may not be defined in the same manner as other companies in the Company’s industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies. Bally’s does not provide reconciliations of Adjusted EBITDA to net income on a forward-looking basis to its most comparable GAAP financial measure because Bally’s is unable to forecast the amount or significance of certain items required to develop meaningful comparable GAAP financial measures without unreasonable efforts. These items include depreciation, impairment charges, gains or losses on retirement of debt, acquisition, integration and restructuring expenses, interest expense, share-based compensation expense, professional and advisory fees associated with Bally’s capital return program and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events, but which are excluded from Bally’s calculations of Adjusted EBITDA. Bally’s believes that the probable significance of providing these forward-looking non-GAAP financial measures without a reconciliation to the most directly comparable GAAP financial measure, is that investors and analysts will have certain information that Bally’s believes is useful and meaningful regarding its operations, including its completed and proposed acquisitions and the estimated impact on those businesses’ results from the anticipated changes Bally’s is likely to make, or has made, to their operations, but will not have that information on a GAAP basis. Investors are cautioned that Bally’s cannot predict the occurrence, timing or amount of all non-GAAP items that may be excluded from Adjusted EBITDA in the future. Accordingly, the actual effect of these items, when determined could potentially be significant to the calculation of Adjusted EBITDA. Second Quarter Conference Call Bally’s second quarter 2022 earnings conference call and audio webcast will be held today, Thursday, August 4, 2022 at 8:00 a.m. EDT. To access the conference call, please dial (800) 343-4849 (U.S. toll-free) and reference conference ID BALYQ22022. The webcast of the call will be available to the public, on a listen-only basis, via the Internet at the Investors section of the Company’s website at www.ballys.com. An online archive of the webcast will be available on the Company’s website for 120 days. Supplemental materials have also been posted to the Investors section of the website, under Events & Presentations. About Bally’s Corporation Bally’s Corporation is a global casino-entertainment company with a growing omni-channel presence of Online Sports Betting and iGaming offerings. It currently owns and manages 14 casinos across 10 states, a horse racetrack in Colorado and has access to OSB licenses in 18 states. It also owns Gamesys Group, a leading, global, online gaming operator, Bally’s Interactive, a first-in-class sports betting platform, Monkey Knife Fight, a daily fantasy sports site in North America, SportCaller, a leading, global B2B free-to-play game provider, and Telescope Inc., a leading provider of real-time fan engagement solutions. With approximately 10,000 employees, Bally’s casino operations include more than 15,800 slot machines, 500 table games and 5,300 hotel rooms. Upon closing the previously announced Tropicana Las Vegas (NV) transaction, as well as completing the construction of a land-based casino near the Nittany Mall in State College, PA, Bally’s will own and manage 16 casinos across 11 states. Its shares trade on the New York Stock Exchange under the ticker symbol “BALY”. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by Bally’s in this press release, its reports filed with the Securities and Exchange Commission (the “SEC”) and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for Bally’s to predict or identify all such events or how they may affect it. Bally’s has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to those included it the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by Bally’s with the SEC. These statements constitute Bally’s cautionary statements under the Private Securities Litigation Reform Act of 1995. BALLY’S CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, Gaming $ 455,088 $ 207,490 $ 918,790 $ 362,768 Hotel 33,929 22,315 60,864 35,374 Food and beverage 27,435 23,382 51,423 38,882 Retail, entertainment and other 36,044 14,546 69,690 22,975 Total revenue 552,496 267,733 1,100,767 459,999 Operating (income) costs and expenses: Gaming 204,051 63,350 423,263 110,604 Hotel 9,731 7,506 18,313 12,655 Food and beverage 21,898 17,004 40,854 29,213 Retail, entertainment and other 14,755 2,021 27,854 3,818 Advertising, general and administrative 181,707 101,211 363,323 181,710 Goodwill and asset impairment — 4,675 — 4,675 Expansion and pre-opening 717 937 717 1,540 Acquisition, integration and restructuring 10,112 18,402 15,392 30,660 Gain from insurance recoveries, net of losses 14 (579) (150) (11,255) Gain on sale-leaseback (50,766) (53,425) (50,766) (53,425) Depreciation and amortization 74,773 25,717 153,654 38,503 Total operating costs and expenses 467,177 187,201 992,928 349,993 Income from operations 85,319 80,532 107,839 110,006 Interest expense, net of amounts capitalized (45,976) (21,829) (91,823) (42,627) Change in value of naming rights liabilities 20,032 19,070 33,411 (8,336) Gain (adjustment) on bargain purchases — 24,114 (107) 24,114 Other, net 5,412 (6,494) 11,619 (3,823) Total other income (expense), net (20,384) 15,391 (46,590) (29,618) Income before income taxes 64,935 95,923 61,249 80,388 Provision (benefit) for income taxes 5,434 26,981 (141) 22,151 Net income $ 59,501 $ 68,942 $ 61,390 $ 58,237 Basic earnings per share $ 0.98 $ 1.43 $ 1.02 $ 1.39 Weighted average common shares outstanding – basic 60,506 48,156 60,263 42,038 Diluted earnings per share $ 0.98 $ 1.40 $ 1.02 $ 1.37 Weighted average common shares outstanding – diluted 60,541 49,102 60,332 42,374 BALLY’S CORPORATION Revenue and Reconciliation of Net Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited) Revenue $ 552,496 $ 267,733 $ 1,100,767 $ 459,999 Net income $ 59,501 $ 68,942 $ 61,390 $ 58,237 Interest expense, net of interest income 45,828 21,299 91,513 41,573 Provision (benefit) for income taxes 5,434 26,981 (141) 22,151 Depreciation and amortization 74,773 25,717 153,654 38,503 Non-operating (income) expense(1) (25,444) (36,690) (44,923) (11,955) Acquisition, integration and restructuring 10,112 18,402 15,392 30,660 Strategic initiatives(2) 5,408 56 6,151 770 Launch costs(3) 7,082 954 8,185 1,340 Share-based compensation 6,322 3,901 11,417 8,384 Gain on sale-leaseback (50,766) (53,425) (50,766) (53,425) Other(4)(5) 2,974 6,688 4,305 (1,541) Adjusted EBITDA $ 141,224 $ 82,825 $ 256,177 $ 134,697 Net income margin 10.8 % 25.8 % 5.6 % 12.7 % (1) Non-operating (income) expense for the applicable periods include: (i) change in value of naming rights liabilities, (ii) gain (adjustment) on bargain purchases, and (iii) other (income) expense, net. (2) Includes costs incurred to address the Standard General takeover bid, the recent tender offer process, credit amendment expenses and rent expense related to Bally’s Black Hawk and Quad Cities properties, as the Company recently entered into sale lease-back transactions associated with these properties to finance the pending Tropicana Las Vegas property acquisition. (3) Includes upfront and ramp up costs related to the launch of interactive businesses in new jurisdictions prior to full operational commencement. (4) Other includes the following items for 2022: (i) $2.1 million of non-routine legal expenses, net of recoveries for matters outside the normal course of business, (ii) storm related gains of $0.2 million related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (iii) rebranding expenses of $0.5 million in connection with Bally’s corporate name change, and (iv) other individually de minimis expenses. (5) Other includes the following items for 2021: (i) asset impairment charges of $4.7 million related to the Dover Downs and Bally’s Black Hawk tradenames in connection with Bally’s rebranding, (ii) $3.4 million of professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, (iii) storm related gains of $0.6 million related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (iv) rebranding expenses of $0.4 million in connection with Bally’s corporate name change, and (v) other individually de minimis expenses. BALLY’S CORPORATION Revenue and Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment and Adjusted EBITDA Margin (unaudited) Revenue $ 299,875 $ 18,050 $ 234,571 $ — $ 552,496 Net income (loss) $ 70,775 $ (24,766) $ 42,504 $ (29,012) $ 59,501 Interest expense, net of interest income (10) (1) (130) 45,969 45,828 Provision (benefit) for income taxes 27,229 (5,758) (5,399) (10,638) 5,434 Depreciation and amortization 14,757 7,273 44,311 8,432 74,773 Non-operating (income) expense(1) — (1,541) 435 (24,338) (25,444) Acquisition, integration and restructuring — 487 884 8,741 10,112 Strategic initiatives(2) 3,018 — — 2,390 5,408 Launch costs(3) — 6,800 — 282 7,082 Gain on sale-leaseback (50,766) — — — (50,766) Other(4) 2,580 — — 394 2,974 Allocation of corporate costs 20,418 545 7 (20,970) — Adjusted EBITDA $ 88,001 $ (16,961) $ 82,612 $ (12,428) $ 141,224 Adjusted EBITDAR $ 99,472 ________________________________ (1) Non-operating (income) expense for the applicable periods include: (i) change in value of naming rights liabilities, (ii) gain (adjustment) on bargain purchases, and (iii) other (income) expense, net. (2) Includes costs incurred to address the Standard General takeover bid, the recent tender offer process and rent expense related to Bally’s Black Hawk and Quad Cities properties, as the Company recently entered into sale lease-back transactions associated with these properties to finance the pending Tropicana Las Vegas property acquisition. (3) Includes upfront and ramp up costs related to the launch of interactive businesses in new jurisdictions prior to full operational commencement. (4) Other includes the following items: (i) non-routine legal expenses, net of recoveries for matters outside the normal course of business ($2.0 million), and (ii) and other individually de minimis expenses. (5) Rent expense associated with triple net leases for the Company’s Bally’s Lake Tahoe, Bally’s Evansville and Bally’s Dover properties. BALLY’S CORPORATION Revenue and Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment and Adjusted EBITDA Margin (unaudited) Three Months Ended June 30, 2021 Casinos &Resorts NorthAmericaInteractive Other Total Revenue $ 262,188 $ 5,545 $ — $ 267,733 Net income (loss) $ 79,644 $ (3,230) $ (7,472) $ 68,942 Interest expense, net of interest income 8 (2) 21,293 21,299 Provision (benefit) for income taxes 29,504 (513) (2,010) 26,981 Depreciation and amortization 13,453 3,385 8,879 25,717 Non-operating (income) expense(1) — 17 (36,707) (36,690) Acquisition, integration and restructuring — — 18,402 18,402 Share-based compensation — — 3,901 3,901 Gain on sale-leaseback (53,425) — — (53,425) Other(4) 4,018 — 2,670 6,688 Allocation of corporate costs 18,604 436 (19,040) — Adjusted EBITDA $ 91,806 $ 93 $ (9,074) $ 82,825 ________________________________ (1) Non-operating (income) expense for the applicable periods include: (i) change in value of naming rights liabilities, (ii) gain (adjustment) on bargain purchases, and (iii) other (income) expense, net. (2) Includes costs incurred related to the amended credit agreement. (3) Includes upfront and ramp up costs related to the launch of interactive businesses in new jurisdictions prior to full operational commencement. (4) Other includes the following items: (i) asset impairment charges of $4.7 million related to the Dover Downs and Bally’s Black Hawk tradenames in connection with Bally’s rebranding, (ii) $2.0 million of professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, (iii) storm related gains of $0.6 million related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (iv) rebranding expenses of $0.4 million in connection with Bally’s corporate name change, and (v) other individually de minimis expenses. BALLY’S CORPORATION Revenue and Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (unaudited) Six Months Ended June 30, 2022 Casinos &Resorts NorthAmericaInteractive InternationalInteractive Other Total Revenue $ 579,845 $ 33,277 $ 487,645 $ — $ 1,100,767 Net income (loss) $ 98,798 $ (50,139) $ 71,312 $ (58,581) $ 61,390 Interest expense, net of interest income (6) (3) 36 91,486 91,513 Provision (benefit) for income taxes 36,457 (8,642) (8,566) (19,390) (141) Depreciation and amortization 30,110 16,247 90,375 16,922 153,654 Non-operating (income) expense(1) — (3,136) 1,550 (43,337) (44,923) Acquisition, integration and restructuring — 776 1,225 13,391 15,392 Strategic initiatives(2) 3,018 — — 3,133 6,151 Launch costs(3) — 7,650 — 535 8,185 Gain on sale-leaseback (50,766) — — — (50,766) Other(4) 2,416 — — 1,889 4,305 Allocation of corporate costs 41,764 961 7 (42,732) — Adjusted EBITDA $ 161,791 $ (36,286) $ 155,939 $ (25,267) $ 256,177 (1) Non-operating (income) expense for the applicable periods include: (i) change in value of naming rights liabilities, (ii) gain (adjustment) on bargain purchases, and (iii) other (income) expense, net. (2) Includes costs incurred to address the Standard General takeover bid, the recent tender offer process and rent expense related to Bally’s Black Hawk and Quad Cities properties, as the Company recently entered into sale lease-back transactions associated with these properties to finance the pending Tropicana Las Vegas property acquisition. (3) Includes upfront and ramp up costs related to the launch of interactive businesses in new jurisdictions prior to full operational commencement. (4) Other includes the following items: (i) $2.1 million of non-routine legal expenses, net of recoveries for matters outside the normal course of business, (ii) storm related gains of $0.2 million related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (iii) rebranding expenses of $0.5 million in connection with Bally’s corporate name change, and (iv) other individually de minimis expenses. (5) Rent expense associated with triple net leases for the Company’s Bally’s Lake Tahoe, Bally’s Evansville and Bally’s Dover properties. BALLY’S CORPORATION Revenue and Reconciliation of Net Income (Loss) to Six Months Ended June 30, 2021 Casinos &Resorts NorthAmericaInteractive Other Total Revenue $ 451,621 $ 8,378 $ — $ 459,999 Net income (loss) $ 112,745 $ (2,771) $ (51,737) $ 58,237 Interest expense, net of interest income 19 (2) 41,556 41,573 Benefit for income taxes 41,450 (605) (18,694) 22,151 Depreciation and amortization 25,061 4,417 9,025 38,503 Non-operating (income) expense(1) — (35) (11,920) (11,955) Acquisition, integration and restructuring — — 30,660 30,660 Launch costs(3) — — 1,340 1,340 Gain on sale-leaseback (53,425) — — (53,425) Other(4) (6,629) — 5,088 (1,541) Allocation of corporate costs 30,205 486 (30,691) — Adjusted EBITDA $ 149,426 $ 1,490 $ (16,219) $ 134,697 (1) Non-operating income (expense) includes: (i) change in value of naming rights liabilities, (ii) gain on bargain purchases and (iii) other, net. (2) Includes costs incurred related to the amended credit agreement. (3) Includes upfront and ramp up costs related to the launch of interactive businesses in new jurisdictions prior to full operational commencement. (4) Other includes the following items: (i) storm related gains of $11.3 million related to insurance recoveries received due to the effects of Hurricane Zeta on the Company’s Hard Rock Biloxi property, (ii) asset impairment charges of $4.7 million related to the Dover Downs and Bally’s Black Hawk tradenames in connection with Bally’s rebranding (iii) $3.4 million of professional fees and other costs incurred to establish the partnership with Sinclair and acquire Bally Interactive, (iv) rebranding expenses of $1.3 million in connection with Bally’s corporate name change, (v) $0.4 million of expenses incurred to establish the partnership with Sinclair, and (vi) other individually de minimis expenses. BALLY’S CORPORATION Selected Financial Information (unaudited) Balance Sheet Data (in thousands) June 30,2022 December 31,2021 Cash and cash equivalents $ 176,158 $ 206,193 Term Loan Facility $ 1,935,275 $ 1,945,000 Revolving Credit Facility — 85,000 5.625% Senior Notes due 2029 750,000 750,000 5.875% Senior Notes due 2031 750,000 750,000 Less: Unamortized original issue discount (29,693) (31,425) Less: Unamortized deferred financing fees (49,515) (52,348) Long-term debt, including current portion $ 3,356,067 $ 3,446,227 Less: Current portion of Term Loan and Revolving Credit Facility $ (19,450) $ (19,450) Long-term debt, net of discount and deferred financing fees; excluding current portion $ 3,336,617 $ 3,426,777 Cash Flow Data Capital expenditures $ 61,565 $ 20,458 $ 2,449 $ 116,081 $ 35,785 $ 5,448 Cash payments associated with triple net operating leases(1) 13,000 — — 23,000 — — (1) Consists of payments made in connection with the Company’s triple net operating leases, as defined above. 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