Bally's (BALY) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2023 was $632.5 million, an increase of 9.5$578.2 million in Q3 2022[246] - Income from operations decreased to $37.2 million in Q3 2023 from$53.7 million in Q3 2022[246] - Net loss for Q3 2023 was $61.8 million compared to a net income of$0.6 million in Q3 2022[246] - For the first nine months of 2023, total revenue reached $1,837.4 million, up from$1,679.0 million in the same period of 2022[246] - Total revenue for Q3 2023 increased by $54.2 million to$632.5 million, a 9.4% increase compared to Q3 2022[253] - Total revenue for the nine months ended September 30, 2023, rose by $158.4 million to$1.84 billion, a 9.4% increase compared to the same period last year[253] - Gaming revenue for Q3 2023 was $508.9 million, up$43.2 million or 9.3% from Q3 2022[253] - Non-gaming revenue for Q3 2023 was $123.6 million, an increase of$11.1 million or 9.8% compared to Q3 2022[249] - Net income for the nine months ended September 30, 2023, was $90.9 million, an increase of$28.9 million, or 46.6%, from $62.0 million in the same period last year[261] Operating Costs and Expenses - Gaming expenses for Q3 2023 increased by$31.9 million to $229.1 million, while for the nine months, they rose by$45.3 million to $665.7 million[254] - General and administrative expenses for Q3 2023 increased by$30.5 million to $230.6 million, and for the nine months, they rose by$152.3 million to $732.1 million[256] - Total operating costs and expenses for Q3 2023 were 94.1$3.2 million to $55.1 million for Q3 2023 and by$77.5 million to $176.0 million for the nine months ended September 30, 2023, primarily due to increased interest expense[259] Adjusted Performance Metrics - Consolidated Adjusted EBITDA for Q3 2023 was$141.6 million, a decrease of $9.3 million, or 6.2$151.0 million in Q3 2022[261] - Adjusted EBITDAR for the Casinos & Resorts segment decreased by $0.6 million to$118.2 million for Q3 2023, while it increased by $30.9 million to$334.3 million for the nine months ended September 30, 2023[262] - Adjusted EBITDAR for the International Interactive segment increased by $9.2 million to$85.5 million for Q3 2023 and by $18.1 million to$250.4 million for the nine months ended September 30, 2023[262] Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2023, were $266.2 million, compared to$167.4 million in the same period last year[284] - The company is committed to invest approximately $100 million over five years to refurbish and upgrade Bally's Atlantic City facilities, with spending in 2023 estimated at$20 million[286] - The company is committed to investing $100 million in Rhode Island over the extended term of its master contracts, which includes expansions and new amenities[239] Debt and Financing Activities - The company has a senior secured term loan facility of$1.945 billion maturing in 2028 and a revolving credit facility of $620.0 million maturing in 2026[276] - As of September 30, 2023, the company had$2.03 billion of variable rate debt outstanding under its Term Loan and Revolving Credit Facilities[296] - During the nine months ended September 30, 2023, the company repurchased 1,774,845 common shares for an aggregate price of $30.5 million under its capital return program[273] - The company repurchased and retired$15.0 million of Senior Notes due 2031 at a weighted average price of 70.80% of the principal, recording a gain on extinguishment of debt of $4.0 million[274] Market and Operational Strategy - The company operates 16 land-based casinos across 10 states, with approximately 15,400 slot machines and 600 table games[230] - Bally's has a strategic focus on expanding its iGaming business, particularly in markets that are expected to regulate iGaming[231] - A new law in Rhode Island allows Bally's to be the exclusive provider of iGaming services for 20 years, starting March 1, 2024[232] - The company experienced incremental revenue from recent acquisitions, including Tropicana Las Vegas and Bally's Chicago, which commenced operations on September 9, 2023[253] - The company commenced operations at its Bally's Chicago temporary casino on September 9, 2023, which includes approximately 800 gaming positions[288] Currency and Foreign Transactions - Foreign currency transaction gains for Q3 2023 were$8.5 million, compared to $0.3 million in Q3 2022, indicating a significant increase[298] - For the nine months ended September 30, 2023, foreign currency transaction gains were$2.5 million, up from $2.2 million in the same period of 2022[298] - The majority of revenues are derived from the UK market, conducted in British Pound Sterling (GBP), making the company susceptible to GBP to US Dollar exchange rate fluctuations[298] - The company employs operational hedges, forward currency exchange rate contracts, and derivative financial instruments to mitigate currency exchange rate risks[298]