Twin River Worldwide Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

trwh-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38850

Twin River Worldwide Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

20-0904604

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

100 Westminster Street

Providence,

02903

(Address of principal executive offices)

(Zip Code)

(401) 475-8474

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12 (b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	TRWH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 7, 2020 there were 30,456,493 shares of the registrant’s common stock outstanding.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

TWIN RIVER WORLDWIDE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands, except share data)


	June 30, 2020		December 31, 2019
Assets
Cash and cash equivalents	$	331,083	$	182,581
Restricted cash	1,647		2,921
Accounts receivable, net	11,917		23,190
Inventory	8,994		7,900
Prepaid expenses and other assets	40,265		28,439
Total current assets	393,906		245,031
Property and equipment, net	540,797		510,436
Right of use assets, net	16,823		17,225
Goodwill, net	133,082		133,082
Intangible assets, net	109,862		110,373
Other assets	5,491		5,740
Total assets	$	1,199,961	$	1,021,887
Liabilities and Shareholders’ Equity
Current portion of long-term debt	$	5,750	$	3,000
Current portion of lease obligations	1,046		1,014
Accounts payable	8,035		14,921
Accrued liabilities	63,843		70,849
Total current liabilities	78,674		89,784
Lease obligations, net of current portion	15,781		16,214
Pension benefit obligations	8,317		8,688
Deferred tax liability	10,569		13,790
Long-term debt, net of current portion	938,140		680,601
Other long-term liabilities	921		1,399
Total liabilities	1,052,402		810,476
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01; 100,000,000 shares authorized; 30,456,493 and 41,193,018 shares issued as of June 30, 2020 and December 31, 2019, respectively; 30,456,493 and 32,113,328 shares outstanding as of June 30, 2020 and December 31, 2019, respectively.	304		412
Additional paid-in-capital	141,297		185,544
Treasury stock, at cost, 0 and 9,079,690 shares as of June 30, 2020 and December 31, 2019, respectively.	—		(223,075)
Retained earnings	7,846		250,418
Accumulated other comprehensive loss	(1,888)		(1,888)
Total shareholders’ equity	147,559		211,411
Total liabilities and shareholders’ equity	$	1,199,961	$	1,021,887

See accompanying notes to condensed consolidated financial statements.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)

(In thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenue:
Gaming	$	23,767	$	100,234	$	99,603	$	191,102
Racing	176		3,783		3,133		6,723
Hotel	2,115		11,390		9,761		17,695
Food and beverage	1,670		18,801		16,986		32,312
Other	1,196		9,010		8,589		16,017
Total revenue	28,924		143,218		138,072		263,849

Operating costs and expenses:
Gaming	9,871		26,078		33,084		47,154
Racing	789		2,833		3,196		5,024
Hotel	1,152		4,183		4,444		6,897
Food and beverage	2,659		15,634		15,935		26,741
Retail, entertainment and other	123		2,125		2,053		3,451
Advertising, general and administrative	23,989		48,047		73,598		86,310
Goodwill and asset impairment (adjustment)	(154)		—		8,554		—
Acquisition, integration and restructuring expense	2,458		2,239		4,244		9,117
Gain on insurance recoveries	(143)		—		(1,026)		—
Depreciation and amortization	9,143		8,233		18,122		15,002
Total operating costs and expenses	49,887		109,372		162,204		199,696
(Loss) income from operations	(20,963)		33,846		(24,132)		64,153

Other income (expense):
Interest income	112		754		255		767
Interest expense, net of amounts capitalized	(15,222)		(9,966)		(26,738)		(17,017)
Loss on extinguishment and modification of debt	—		(1,491)		—		(1,491)
Other, net	—		182		—		182
Total other expense, net	(15,110)		(10,521)		(26,483)		(17,559)

(Loss) income before provision for income taxes	(36,073)		23,325		(50,615)		46,594

(Benefit) provision for income taxes	(12,518)		6,145		(18,182)		11,818
Net (loss) income	$	(23,555)	$	17,180	$	(32,433)	$	34,776

Net (loss) income per share, basic	$	(0.77)	$	0.42	$	(1.05)	$	0.88
Weighted average common shares outstanding, basic	30,452		41,137		31,011		39,701
Net (loss) income per share, diluted	$	(0.77)	$	0.42	$	(1.04)	$	0.87
Weighted average common shares outstanding, diluted	30,549		41,261		31,104		39,822

Note: Net (loss) income equals comprehensive income for all periods presented.

See accompanying notes to condensed consolidated financial statements.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)

(In thousands, except share data)


	Common Stock					Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares Outstanding	Amount
Balance as of December 31, 2019	32,113,328	$	412	$	185,544	$	(223,075)	$	250,418	$	(1,888)	$	211,411
Release of restricted stock	131,131	1		(2,484)		—		—		—		(2,483)
Dividends and dividend equivalents - $0.10 per share	—	—		—		—		(3,174)		—		(3,174)
Share-based compensation - equity awards	—	—		5,542		—		—		—		5,542
Retirement of treasury shares	—	(107)		(48,618)		254,416		(205,691)		—		—
Share repurchases	(1,649,768)	—		—		(31,341)		—		—		(31,341)
Adoption of ASU 2016-13	—	—		—		—		(58)		—		(58)
Net loss	—	—		—		—		(8,878)		—		(8,878)
Balance as of March 31, 2020	30,594,691	$	306	$	139,984	$	—	$	32,617	$	(1,888)	$	171,019
Release of restricted stock	24,427	—		(81)		—		—		—		(81)
Share-based compensation - equity awards	—	—		2,127		—		—		—		2,127
Retirement of treasury shares	—	(2)		(733)		1,951		(1,216)		—		—
Share repurchases	(162,625)	—		—		(1,951)		—		—		(1,951)
Net loss	—	—		—		—		(23,555)		—		(23,555)
Balance as of June 30, 2020	30,456,493	$	304	$	141,297	$	—	$	7,846	$	(1,888)	$	147,559


	Common Stock					Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Shares Outstanding	Amount
Balance as of December 31, 2018	37,989,376	$	380	$	125,629	$	(30,233)	$	202,884	$	—	$	298,660
Release of restricted stock	161,980	1		—		—		—		—		1
Share-based compensation - equity awards	—	—		151		—		—		—		151
Retirement of treasury shares	—	—		(30,233)		30,233		—		—		—
Share repurchases	(16,340)	—		—		(409)		—		—		(409)
Stock issued for purchase of Dover Downs	2,976,825	30		86,750		—		—		—		86,780
Net income	—	—		—		—		17,596		—		17,596
Balance as of March 31, 2019	41,111,841	$	411	$	182,297	$	(409)	$	220,480	$	—	$	402,779
Release of restricted stock	35,756	—		—		—		—		—		—
Dividends and dividend equivalents - $0.10 per share	—	—		—		—		(4,144)		—		(4,144)
Share-based compensation - equity awards	—	—		1,628		—		—		—		1,628
Net income	—	—		—		—		17,180		—		17,180
Balance as of June 30, 2019	41,147,597	$	411	$	183,925	$	(409)	$	233,516	$	—	$	417,443

See accompanying notes to condensed consolidated financial statements.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(In thousands)


	Six Months Ended June 30,
	2020		2019
Cash flows from operating activities:
Net (loss) income	$	(32,433)	$	34,776
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation of property and equipment	14,951		12,113
Amortization of intangible assets	3,171		2,889
Amortization of operating lease right of use assets	517		722
Share-based compensation - equity awards	7,669		1,779
Amortization of debt financing costs and discounts on debt	1,974		1,428
Loss on debt extinguishment and modification of debt	—		1,491
Bad debt expense	813		58
Net pension and other postretirement benefit income	—		(39)
Deferred income taxes	(3,221)		—
Gain on disposal of property and equipment	—		(8)
Goodwill and asset impairment	8,554		—
Changes in operating assets and liabilities:
Accounts receivable	10,402		708
Inventory	(955)		122
Prepaid expenses and other assets	(10,978)		(944)
Accounts payable	(7,389)		(300)
Accrued liabilities	(9,456)		1,871
Net cash (used in) provided by operating activities	(16,381)		56,666
Cash flows from investing activities:
Acquisition of Dover Downs Gaming & Entertainment, Inc., net of cash acquired	—		(9,606)
Acquisition of Black Hawk Casinos, net of cash acquired	(50,451)		—
Proceeds from sale of property and equipment	—		7
Capital expenditures, excluding Tiverton Casino Hotel and new hotel at Twin River Casino	(5,448)		(13,114)
Capital expenditures - Tiverton Casino Hotel	—		(1,824)
Capital expenditures - new hotel at Twin River Casino	—		(3,741)
Payments associated with licenses	—		(942)
Net cash used in investing activities	(55,899)		(29,220)
Cash flows from financing activities:
Revolver borrowings	250,000		25,000
Revolver repayments	(250,000)		(80,000)
Term loan proceeds, net of fees of $13,820 and $10,655, respectively	261,180		289,345
Term loan repayments	(1,500)		(342,439)
Senior note proceeds, net of fees of $0 and $6,130, respectively	—		393,870
Payment of financing fees	(1,117)		(3,358)
Share repurchases	(33,292)		(409)
Payment of shareholder dividends	(3,199)		—
Share redemption for tax withholdings - restricted stock	(2,564)		—
Net cash provided by financing activities	219,508		282,009

Net change in cash and cash equivalents and restricted cash	147,228		309,455
Cash and cash equivalents and restricted cash, beginning of period	185,502		81,431
Cash and cash equivalents and restricted cash, end of period	$	332,730	$	390,886

Supplemental disclosure of cash flow information:
Cash paid for interest	$	23,402	$	10,960
Cash paid for income taxes, net of refunds	(165)		8,794

Non-cash investing and financing activities:
Unpaid property and equipment	$	177	$	614
Deposit applied to fixed asset purchases	—		981
Termination of operating leases via purchase of underlying assets	—		1,665
Stock issued for acquisition of Dover Downs Gaming & Entertainment, Inc.	—		86,780

See accompanying notes to condensed consolidated financial statements.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Twin River Worldwide Holdings, Inc. (the “Company”, “TRWH”) is a diverse, multi-jurisdictional owner and operator of gaming and racing facilities, including slot machines and various casino table games, and restaurant and hotel facilities. The Company, through its wholly owned subsidiary Twin River Management Group, Inc. (“TRMG”), owns and manages the Twin River Casino Hotel (“Twin River Casino Hotel”) in Lincoln, Rhode Island, the Tiverton Casino Hotel (“Tiverton Casino Hotel”) in Tiverton, Rhode Island, the Hard Rock Hotel & Casino (“Hard Rock Biloxi”) in Biloxi, Mississippi, the Dover Downs Hotel & Casino (“Dover Downs Casino Hotel”) in Dover, Delaware, the Golden Gates, Golden Gulch and Mardi Gras casinos (collectively, “Black Hawk Casinos”) in Black Hawk, Colorado and the Arapahoe Park racetrack and 13 off-track betting licenses (“Mile High USA”) in Aurora, Colorado. Following the closure of the Newport Grand Casino (“Newport Grand”) in August 2018, the Company opened the Tiverton Casino Hotel on September 1, 2018. On March 28, 2019, the Company completed its acquisition of Dover Downs Gaming & Entertainment, Inc., which included Dover Downs Casino Hotel (“Dover Downs”). On January 23, 2020, the Company completed its acquisition of the Black Hawk Casinos. On July 1, 2020, the Company completed its acquisition from Eldorado Resorts, Inc., (“Eldorado”) of the operations and real estate of Isle of Capri Casino Kansas City in Kansas City, Missouri, (subsequently rebranded as “Casino KC”), and Lady Luck Casino Vicksburg in Vicksburg, Mississippi (subsequently rebranded as “Casino Vicksburg”). On April 24, 2020, the Company announced that it had entered into an agreement with Eldorado to acquire Eldorado Shreveport Resort and Casino in Shreveport, Louisiana and the MontBleu Resort Casino & Spa in Lake Tahoe, Nevada and into an agreement with Caesars Entertainment Corporation and VICI Properties Inc. to acquire Bally's Atlantic City Hotel & Casino in Atlantic City, New Jersey. On July 20, 2020 Eldorado completed its acquisition of Caesars Entertainment Corporation, as a result of which Eldorado merged with and into Caesars Entertainment Corporation, with Caesars Entertainment Corporation surviving the merger. See Note 4. “Acquisitions” for further information.

On March 29, 2019, the Company’s common stock was listed on the New York Stock Exchange and began trading under the ticker symbol “TRWH.”

COVID-19 Pandemic

The novel coronavirus (“COVID-19”) pandemic has caused significant disruption to the US and global economy as well as financial markets around the world and has impacted, and is likely to continue to impact, the Company’s business in a material manner. As of March 16, 2020 all of the Company’s properties at the time were temporarily closed as a result of the COVID-19 pandemic and as of March 17, 2020, all of the properties the Company had entered into agreements to acquire were also temporarily closed. As of June 17, 2020, all of the Company’s properties, including the subsequently acquired Casino KC and Casino Vicksburg have reopened and are operating in some capacity. The following is an update of re-openings and current operations by property.

•Twin River Casino Hotel and Tiverton Casino Hotel - The Rhode Island properties pre-opened on June 8, 2020 with very limited invitation only guests allowed. Beginning June 30, 2020, the Company was able to open to the general public, at approximately 65% capacity, with half of VLTs and a limited number of table games, with a three player limit, available. The hotels at the Rhode Island properties remain closed at this time.

•Hard Rock Biloxi - The Biloxi property re-opened to the general public, at 50% capacity, on May 21, 2020 with 41% of VLTs, all table games, with a three player limit, and 75% of the hotel rooms available to guests. Currently, Hard Rock Biloxi is still operating at 50% capacity, however, over 60% of VLTs are available and the hotel is currently operating with all rooms available to guests.

•Dover Downs Casino Hotel - The Delaware property re-opened, at 30% capacity, on June 1, 2020, with 45% of VLTs. Table games, with a two player limit, became available to guests on June 17, 2020 and the hotel, at 60% room capacity, became available on June 18, 2020. Currently, the property is operating at approximately 60% capacity, with about half of VLTs, and all table games, with a three player limit, and all hotel rooms available to guests.

•Casino KC - Casino KC re-opened, at 50% capacity, on June 1, 2020 with 70% of VLTs and 30% of table games, with a three player limit, available to guests. Casino KC is still operating at this capacity.

TWIN RIVER WORLDWIDE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

•Casino Vicksburg - Casino Vicksburg re-opened, at 50% capacity, on May 21, 2020 with 48% of VLTs and 50% of hotel rooms available to guests. Currently, Casino Vicksburg is still operating at 50% capacity, however, over 65% of VLTs are available and the hotel is currently operating with all rooms available to guests.

•Black Hawk Casinos - The Black Hawk Casinos re-opened, at 50% capacity, on June 17, 2020 with 55% of VLTs available to guests. Currently, they are still operating at 50% capacity, however, over 64% of VLTs are now available to guests.

The Company remains committed to compliance with all state and local re-opening requirements as well as and meeting or exceeding all guidelines established by the Centers for Disease Control and Prevention (“CDC”). The Company has implemented property-specific comprehensive health and safety protocols for each of its properties, developed in close consultation with applicable state regulators and public health officials in local jurisdictions. The Company’s operations are expected to continue to be negatively impacted by the COVID-19 pandemic and that impact could be material.

Principles of Consolidation

The accompanying condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary TRMG and its subsidiaries. All intercompany transactions and balances have been eliminated in the consolidation. Certain prior year amounts have been reclassified to conform to the current year’s presentation.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, including the instructions to Form 10-Q and Rule 10-01 of the SEC’s Regulation S-X. Accordingly, certain information and note disclosures normally required in complete financial statements prepared in conformity with accounting principles generally accepted in the United States have been condensed or omitted. In the Company’s opinion, these condensed consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Except as described below and in the Notes to the condensed consolidated financial statements, there were no material changes in significant accounting policies from those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financing statements and the accompanying notes. The inputs into our judgments and estimates consider the economic implications of the COVID-19 pandemic on our critical and significant accounting estimates. The actual results that we experience may differ materially from our estimates.

Cash and Cash Equivalents and Restricted Cash

The Company considers all cash balances and highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

As of June 30, 2020 and December 31, 2019, restricted cash of $1.6 million and $2.9 million, respectively, was comprised of video lottery terminal (“VLT”) and table games cash, payable to the State of Rhode Island, and certain cash accounts at Dover Downs, which is unavailable for the Company’s use. The following table reconciles cash and restricted cash in the condensed consolidated balance sheets to the total shown on the condensed consolidated statements of cash flows.


	June 30,		December 31,
(in thousands)	2020		2019
Cash and cash equivalents	$	331,083	$	182,581
Restricted cash	1,647		2,921
Total cash and cash equivalents and restricted cash	$

Price	-0.00	EPS	1
Shares	39	P/E	-0
MCap	-0	P/FCF	-0
Net Debt	450	EBIT	89
TEV	450	TEV/EBIT	5
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-13
10-Q	2020-03-31	Filed 2020-05-14
10-K	2019-12-31	Filed 2020-03-13
10-Q	2019-09-30	Filed 2019-11-14
10-Q	2019-06-30	Filed 2019-08-12
S-1	2019-06-14	Public Filing
10-Q	2019-03-31	Filed 2019-05-15
10-K	2018-12-31	Filed 2019-04-01

8-K	2020-08-11	Earnings, Exhibits
8-K	2020-07-01	M&A, Regulation FD, Exhibits
8-K	2020-05-19
8-K	2020-05-13
8-K	2020-05-11
8-K	2020-04-24
8-K	2020-04-24
8-K	2020-03-16
8-K	2020-03-13
8-K	2020-03-03
8-K	2020-02-10
8-K	2020-01-30
8-K	2020-01-13
8-K	2019-12-09
8-K	2019-11-14
8-K	2019-08-12
8-K	2019-07-22
8-K	2019-07-10
8-K	2019-06-10
8-K	2019-05-17
8-K	2019-05-14
8-K	2019-05-10
8-K	2019-05-02
8-K	2019-04-29
8-K	2019-04-17
8-K	2019-04-08
8-K	2019-03-26
8-K	2019-03-19
8-K	2019-03-18

EX-31.1	trwh-2020630x10qxex311.htm
EX-31.2	trwh-2020630x10qxex312.htm
EX-32.1	trwh-2020630x10qxex321.htm
EX-32.2	trwh-2020630x10qxex322.htm


		Page No.

	PART I

ITEM 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited)	5
	Condensed Consolidated Statements of Cash Flows (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	44
ITEM 4.	Controls and Procedures	45
	PART II
ITEM 1.	Legal Proceedings	46
ITEM 1A.	Risk Factors	46
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
ITEM 3.	Defaults Upon Senior Securities	44
ITEM 4.	Mine Safety Disclosures	48
ITEM 5.	Other Information	48
ITEM 6.	Exhibits	49
	Signatures	50

TRWH 10Q Quarterly Report

Twin River Worldwide Earnings 2020-06-30