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Empire Resorts Announces Fourth Quarter and Full Year Results |
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Empire Resorts, Inc. (NASDAQ: NYNY) today reported financial results for the fourth quarter and full year ended December 31, 2005.
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Net revenue for the fourth quarter was $22.5 million, up 25% from the $17.9 million reported in the fourth quarter of 2004. Revenue from racing increased by approximately $1.8 million, or 54.0%, while revenue from the company's video gaming machine (VGM) operations rose by approximately $2.7 million, or 19.7%. The growth in racing revenue was a result of higher revenue allocations from off-track betting facilities. Operating costs rose by approximately $1.4 million, or 7%, for the quarter versus the prior-year period, in line with the rise in revenue. Operating expenses also included stock-based compensation charges of $0.6 million for the quarter, versus $0.7 million in 2004. The company posted operating income of $1.8 million compared to an operating loss of $(2.0) million in the fourth quarter of 2004. EBITDA fell to $(9.8) million from $(1.8) million in the prior year due to the write-off of development costs in the amount of $11.9 million. Net loss for the fourth quarter, including the impact of these non-cash charges, was $(12.1) million, or $(0.46) per diluted share, compared to $(3.3) million, or $(0.13) per diluted share, in the prior-year period.
For the full fiscal year, Empire reported net revenue of $86.8 million versus $45.0 million in 2004, reflecting the impact of the VGM business, which began in June, 2004. Operating income rose to $1.1 million in 2005 from a loss of $(10.5) million in 2004. Including the write-off of $14.3 million in development costs, EBITDA was $(12.1) million for the year as compared with $(10.0) million in the prior period. Stock-based compensation charges amounted to $4.3 million in 2005 versus $3.0 million in 2004. Empire's net loss for the 2005 was $(20.1) million, or $(0.77) per share, versus $(14.3) million, or $(0.57) per share, last year.
Reflecting on these results, David Hanlon, CEO and president, commented, "The fourth quarter showed further growth in our core operations and progress in our path towards profitability. While we felt it necessary to take a charge of $11.9 million in the period related to certain development projects, the company, excluding such non-cash write-offs, achieved operating income in the fourth quarter. We are also pleased to have entered into arbitration with our horsemen earlier this year, and we expect to have a resolution reached soon.
"In terms of our casino plans at Monticello, we continue to await feedback from the Bureau of Indian Affairs. We anticipate a meeting with the BIA in the near future, during which our partners, the St. Regis Mohawk Tribe, will be given a list of items requiring additional review to complete the environmental impact assessment. We look forward to discussions with the BIA and moving forward with our plans to bring a world-class Native American casino to the Catskills."
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.
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