As company emerges from Chapter 11, emphasis will be on internally funded operational improvements
Tropicana Entertainment, LLC today posted to its website a summary of its preliminary business plan which would serve as a basis for a Chapter 11 plan of reorganization. The plan emphasizes internally funded operational improvements and high-priority capital investments.
'The summary is intended to give our constituents timely insight as to the performance of our properties as well our current thinking about what we need to do to capitalize on our widely recognized brand name and position Tropicana as the high quality, value priced competitor in our markets,' said Tropicana CEO Scott C. Butera.
Butera said that the plan addresses all of the properties in Tropicana's equity portfolio without regard to the status of operational control or potential property sales. As such, he emphasized that the inclusion of the company's New Jersey, Indiana and other properties is not meant to indicate the company's position with respect to the dispositions of those assets.
The plan estimates that the 11 Tropicana properties will produce 2008 net revenue of $995 million and EBITDA of $129 million. The plan projects $64 million in capital expenditures from internally generated cash, but notes that performance improvements could accelerate if the company can acquire additional capital resources to support its post-Chapter 11 business.
'Given the uncertain state of capital markets, our plan is focused on improvements that can be internally generated without reliance on outside funds,' Butera asserted. 'Initially, our efforts will center on areas where there are immediate returns on investment ranging from improved slot products and property configurations to normalized labor practices, consolidated back room operations and enhanced restaurant menus and food quality.
'We will be emerging into one of the most difficult markets for gaming and hospitality services ever experienced by the industry,' Butera said. 'The key for us will be to stabilize our revenue base and grow profits through aggressive cost management, strategic investments in products, services and facilities, targeted customer development and retention programs, and a more motivated and service-driven staff.
"As we make progress in these areas, Tropicana ought to be well positioned to take advantage of funding and other opportunities when capital markets improve,' Butera concluded.
The 14-page business plan summary can be viewed at www.tropicanacasinos.com, where the company periodically posts information and updates on its operations for access by interested parties.
