Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the “Company”) provided an update today on the expected timing for the filing with the Securities and Exchange Commission (“SEC”) of the restatement of its financial statements filed since the spin-off (the “Spin-off”) of its real estate assets to Gaming and Leisure Properties, Inc. (“GLPI”) on November 1, 2013 (the “Restatement”). Penn National now expects to submit the restated filings by no later than February 29, 2016, the date by which its audited financial statements for the year-ended December 31, 2015 are due.

As previously disclosed, the Restatement arose from the Company’s change in the classification of its Master Lease (the “Master Lease”) with GLPI from an operating lease to a financing obligation. The updated timing for the submission of the restated filings reflects an ongoing review undertaken in connection with the Restatement. While this review is ongoing, the Company currently expects to make adjustments to its previously recorded 2014 and 2013 goodwill and intangible asset impairment charges, to report the fees paid to relocate its Ohio racetracks as an indefinite lived intangible asset as opposed to a depreciating asset, and to report Hollywood Casino Baton Rouge and Hollywood Casino Perryville, which were spun off to GLPI, as discontinued operations.

The Company’s cash flows for all prior and future periods will not be affected by any of the above-noted changes in accounting, nor will its current tax treatment with respect to the Spin-off transaction. In addition, the adjustments in the Restatement will have no impact on the following indicators of the Company’s performance:

  • the Company’s cash position;
  • the Company’s leverage ratios under its senior credit facility and other debt instruments (as the terms of those obligations require the Master Lease to be treated as an operating lease regardless of the treatment required under GAAP);
  • the Company’s revenues from continuing operations; or
  • the Company’s rental payments or other obligations under the Master Lease.

As previously disclosed, the Company also anticipates that, as a result of the change in lease classification, it will report additional liabilities which represent the present value of the future minimum lease payments to GLPI under the Master Lease. The Company approximates this liability will amount to $3.58 billion as of September 30, 2015.

On November 13, 2015, the Company disclosed that it received a notice from The Nasdaq Stock Market (“NASDAQ”) that it is not in compliance with NASDAQ Listing Rule 5250(c)(1) because the Company did not file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 in a timely manner. Penn National also confirmed today that it will submit a plan to regain compliance with NASDAQ listing requirements by January 8, 2016. This plan is expected to extend compliance for an additional 180 days. Further, the Company is currently in discussions with its lenders under the Company’s senior secured credit facility to secure a waiver to further extend the period for the Company to file its financial statements for the quarter ended September 30, 2015.

Reiterates 2015 Fourth Quarter and Full Year Guidance

Penn National also announced today that, based on the performance of the business to date in the fourth quarter of 2015, it is reiterating the Company’s 2015 fourth quarter and full year financial guidance initially provided on October 22, 2015. The Company continues to expect that net revenues and Adjusted EBITDA for the three months ending December 31, 2015 will be $722.5 million and $181.6 million, respectively. For the full year ending December 31, 2015, the Company expects to report net revenues of $2,786.3 million and Adjusted EBITDA of $754.5 million.

About Penn National Gaming, Inc.

Penn National owns, operates or has ownership interests in gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment. At September 30, 2015, the Company operated twenty-seven facilities in seventeen jurisdictions, including Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. At September 30, 2015, in aggregate, Penn National operated approximately 34,000 gaming machines, 800 table games and 4,600 hotel rooms.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “seeks,” “may,” “will,” “should” or “anticipates” or the negative or other variations of these or similar words. Although the Company believes that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business, there can be no assurance that actual results, including the impact of the Restatement, will not differ materially from our expectations. Meaningful factors that could cause actual results to differ from expectations include, but are not limited to, risks relating to the final impact of the Restatement on the Company’s financial statements; the impact of the Restatement on the Company’s evaluation of the effectiveness of its internal control over financial reporting; delays in the preparation of the financial statements; the risk that the Company will not be able to file its periodic reports with the Securities and Exchange Commission by the deadlines imposed by the NASDAQ listing requirements; the risk that additional information will come to light during the course of the preparation of restated financial statements that alters the scope or magnitude of the Restatement; potential reviews, litigation or other proceedings by governmental authorities, stockholders or other parties; the risk that the Company will be unable to obtain any required waivers under the Company’s senior credit facility or its note indenture with respect to a significant delay in filing periodic reports with the Securities and Exchange Commission and the associated risk of additional incidental interest expense; the risk that the Company will not achieve its fourth quarter and full year guidance due to changes in our expected operating performance or due to one-time non-operational charges; risks relating to our liquidity and ability to raise capital; risks related to the impact on the Restatement on the Company’s reputation, development projects, joint ventures and other material commercial contracts; and other factors as discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the United States Securities and Exchange Commission. The Company does not intend to update publicly any forward-looking statements except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur.

Penn National Gaming, Inc.Saul V. Reibstein, 610-401-2049Chief Financial OfficerorJCIRJoseph N. Jaffoni, Richard Land212-835-8500penn@jcir.com

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