One thing that the seeking alpha article does not take into account is the high corporate expenses this company has.....and has had a history of paying. Lyle Berman only very recently dropped the corporate jet (roughly 18 months ago I would say) Does one 35 million dollar casino warrant the current CEO salary and the salaries of all of management. Granted they did have Red Hawk up until recently........but otherwise they are passive investors for all their remaining holdings
IMO Lyle and his other management buddies will take a nice long vacation (paid of course) as they look to find a casino property to buy. And it could be awhile until their next move is revealed.
To start with a positive: I like seeing how corporate expenses is now at approx 600K a quarter and in the conference call Shaunnessy said that he expects it to remain in the 600K-625K range.
Quarter results were lower than expected. Washington cardrooms had about half the EBITA anticipated. I do believe management and their explanation of it due to lack of rain in June/July--Seattle is a nice city and I am sure people are not in the card rooms when it is perfect weather outside. One thing I was surprised with in the conference call was the attack by shareholders saying Washington cardrooms were not living to potential. These were the same card room that for the previous two quarters had their best numbers ever and beat expectations. The very same Washington cardrooms that were the main contributors to the 5.8M adjusted EBITA for the company last year. Considerign the company paid 28M for all of Washington cardrooms: the company has put together a respectable business with the 10 card rooms. I will allow one bad quarter due to weather. The core part of the company is still intact- and I think they are better poised for better results in future with lower corporate expenses.
Question for posters on this board: do you believe the legalization of marijuana in Washington is something that is a good thing for card rooms, a bad thing, or will have no impact?