Bally's (BALY) - 2025 Q1 - Quarterly Report

Company Overview - As of March 31, 2025, the company owns and manages 19 casinos across 11 states in the US and one casino in the UK, with a recent merger adding four additional casinos to its portfolio[205]. - The company has a significant stake in Intralot S.A., a global lottery management business, which diversifies its revenue streams[205]. - The company completed a merger with The Queen Casino & Entertainment Inc. on February 7, 2025, enhancing its market presence[208]. Financial Performance - Total revenue for the Successor period from February 8, 2025 to March 31, 2025 was $368.7 million, a decrease of 5% or$ 29.3 million from $618.5 million in the three months ended March 31, 2024[226]. - Net income for the Successor period was$ 34.5 million, compared to a net loss of $51.0 million for the Predecessor period and a net loss of$ 173.9 million for the three months ended March 31, 2024[234]. - Gaming revenue for the Successor period was $313.8 million, up 3% or$ 8.8 million from the previous year, while International Interactive revenue decreased by 22% or $42.9 million[226]. - Adjusted EBITDA for the Successor period was$ 83.3 million, compared to $116.5 million for the three months ended March 31, 2024[235]. - Adjusted EBITDAR for the Casinos & Resorts segment was$ 71.5 million for the Successor period, down from $89.4 million in the three months ended March 31, 2024[236]. - Total revenue for the Successor period from February 8, 2025 to March 31, 2025 was$ 368.7 million, a significant increase from $220.5 million in the Predecessor period[239]. - Adjusted EBITDA for the Successor period was$ 83.3 million, compared to $24.4 million in the Predecessor period, reflecting a strong operational performance[239]. - The effective tax rate for the Successor period was 155.2%, reflecting a benefit for income tax of$ (97.1) million[232]. Expenses and Costs - General and administrative expenses increased by 11% or $26.4 million to$ 160.4 million compared to $248.4 million in the three months ended March 31, 2024, primarily due to costs related to the Merger Agreement[228]. - Depreciation and amortization expenses decreased by 56% or$ 89.9 million to $69.8 million, driven by accelerated depreciation recorded in the first quarter of 2024[229]. - Total operating costs and expenses for the Successor period were 100.5% of total revenue, down from 112.0% in the previous year[222]. - Interest expense increased to (14.0)% of total revenue for the Successor period, compared to (11.8)% in the previous year[222]. Investments and Capital Expenditures - The company is committed to investing$ 100 million in Rhode Island over the term of its regulatory agreement, which includes expanding Bally's Twin River and adding new amenities[215]. - Capital expenditures for the Successor period from February 8, 2025, to March 31, 2025, were $30.5 million, while the Predecessor Period from January 1, 2025, to February 7, 2025, was$ 16.4 million[274]. - The Company expects to spend at least $1.34 billion on the design, construction, and outfitting of its temporary casino and permanent resort and casino in Chicago[278]. - The Company committed to invest$ 100 million in Bally's Twin River over the term of its master contract, with approximately $45 million remaining as of March 31, 2025[275]. Debt and Financing - The Company entered into a Credit Agreement providing for a senior secured term loan facility of$ 1.945 billion, maturing in 2028, and a revolving credit facility of $620 million, maturing in 2026[263]. - The Company issued$ 500 million in first lien senior secured notes due October 2, 2028, at an annual interest rate of 11% as part of the merger financing[262]. - As of March 31, 2025, the Company had $2.02 billion of variable rate debt outstanding under its Term Loan and Revolving Credit Facilities[283]. - A hypothetical increase of 1% in the effective interest rate would cause an increase in interest expense of approximately$ 20.2 million over the next twelve months[283]. - As of March 31, 2025, the Company was in compliance with all applicable covenants related to its credit facilities, including maintaining a first lien secured indebtedness to Adjusted EBITDA ratio of 5.00 to 1.00 when borrowings exceed 30% of the total revolving commitment[265]. Cash Flow - Net cash provided by operating activities for the Successor period was $42.0 million, contrasting with a net cash used of$ 80.2 million in the Predecessor period[255]. - Cash and cash equivalents at the end of the Successor period totaled $264.7 million, up from$ 230.9 million at the beginning of the period[254]. - Net cash used in investing activities for the Successor period was $20.8 million, compared to$ 17.7 million in the Predecessor period[256]. - Financing activities provided $14.1 million in the Successor period, a 118.3% increase from$ 51.3 million in the three months ended March 31, 2024[257]. Regulatory and Compliance - The company operates under a regulatory agreement in Rhode Island that imposes financial covenants and operational restrictions, including a leverage ratio limit of 5.50 to 1.00[213]. - The company is focusing on the integration of acquired assets and capital deployment for strategic growth projects, positioning itself as a vertically integrated iGaming company[207]. - The company faces risks from global economic challenges, including rising inflation and interest rates, which could impact consumer spending and visitation to its properties[216]. Sponsorship and Agreements - The Company has entered into several sponsorship agreements with obligations totaling $122.7 million, extending through 2036[279].