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
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Three Months Ended June 30, |
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(in thousands, except percentages) |
2022 |
2021 |
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Revenue |
$ 552,496 |
$ 267,733 |
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|
Net income |
$ 59,501 |
$ 68,942 |
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Net income margin |
10.8 % |
25.8 % |
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|
Adjusted EBITDA(1) |
$ 141,224 |
$ 82,825 |
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Adjusted EBITDA margin(1) |
25.6 % |
30.9 % |
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(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.
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”.
