Bally's (US:BALY)2023-11-02 09:05Financial Data and Key Metrics Changes - Consolidated revenues increased by 9.4% year-over-year, reaching approximately $633 million [5][27] - Consolidated adjusted EBITDA rose by 6.4% year-over-year, totaling $173 million [5][27] - Adjusted EBITDA margin for Casino & Resorts was 33%, while for International Interactive it was 35% [27][31] Business Line Data and Key Metrics Changes - Casino & Resorts revenues increased by 9.3% year-over-year, totaling $359 million, with adjusted EBITDA of $180 million [9][28] - Bally's International Interactive generated revenues of $244 million, a 7% increase year-over-year, with adjusted EBITDA of $85 million, reflecting a 12% increase [14][28] - North America Interactive reported revenues of $30 million but had a negative adjusted EBITDA of $18 million [30] Market Data and Key Metrics Changes - The U.K. market for Bally's International Interactive saw a revenue increase of 13.1% year-over-year [14][29] - In North America, the company is focused on expanding its iGaming footprint, with positive early results in Pennsylvania since its June 2023 launch [15][30] Company Strategy and Development Direction - The company aims to grow market share while maintaining cost control, with a focus on executing growth initiatives across all business segments [5][26] - Significant investments in the Chicago Temporary Casino and Kansas City property are expected to contribute to growth and profitability in 2024 [6][13] - The company is preparing for the launch of iGaming in Rhode Island in March 2024, which is anticipated to be a transformative development [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate competitive pressures and maintain margins, particularly in the Casino & Resorts segment [10][18] - The company is closely monitoring consumer spending patterns and general economic conditions, ready to act if necessary to protect profitability [32] - Despite some anticipated costs in the first half of 2024, operations are expected to improve financially as the North America Interactive business scales [19][20] Other Important Information - The company has $178 million in cash and $3.3 billion in net debt, with a capital expenditure guidance of $160 million for 2023 [34][35] - The Chicago permanent facility is expected to commence construction in the second half of 2024, with an anticipated opening in September 2026 [22][23] Q&A Session Summary Question: Can you walk us through the ramp expected in Chicago for the rest of this year and next year? - Management indicated that the Chicago Temporary Casino is showing week-over-week growth and expects to achieve an annual run rate of about $50 million plus in EBITDAR [36][38] Question: Can you help us think of a scenario where revenues would come in at the low end of the guidance? - Management noted that FX exposure, competitive pressures, and the situation with Tropicana could impact revenue, but they remain confident in minimizing the impact [40][42] Question: Is there availability to buy back some stock given the market dislocation? - Management stated they are always assessing the best use of free cash and are aware of the attractive pricing of their equity [43][44] Question: Can you provide color on the funding of the hard costs for the Chicago project? - Management confirmed they have a $500 million facility with Blue Owl and are focused on construction financing for the remaining costs [46][47] Question: How do you think about your OpEx structure in relation to competitive pressures? - Management emphasized careful management of fixed costs and a focus on variable costs to meet demand, maintaining margins despite competitive pressures [48][49] Question: Is there a strategy shift regarding International Interactive investments? - Management confirmed they will spend where ROI stacks up, maintaining a focus on growing share while managing costs effectively [70][71]