Pinnacle Entertainment Inc. (NASDAQ:PNK) Q2 2015 Earnings Conference Call - Final Transcript

Jul 30, 2015 • 10:00 am ET

Previous

Pinnacle Entertainment Inc. (NASDAQ:PNK) Q2 2015 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Executive
Ginny Shanks

seeing in the business fundamentals, progress made on our revenue synergy initiatives, profitable market share gains, and the performance of L'Auberge Lake Charles and Belterra Park.

In terms of how the quarter played out, we saw very strong April with each property hosting mychoice renewal events during the month. These events are proving to be second only to New Year's Eve in terms of the impact they have had on our financial performance. The month of May was also strong across the portfolio. June softened a bit, however, this is isolated to the south, where severe flooding in both Houston and Bossier City negatively affected visitation to our Lake Charles and Bossier City property. Revenues in June were otherwise solid, increasing 4% at all of our other locations collectively. As I mentioned earlier, July has been a strong month looking more like what we experienced during the first five months of the year.

Moving now into revenue synergies. We continued to see the benefits of the integration work that was completed in 2014. Table games' growth, hotel revenue management and the launch of the mychoice program last year at the Ameristar property had been our focus since the acquisition. I'm pleased to report we have seen growth across all three areas. Starting with table games, we continued to see very good performance with trips for this segment up 12% and Co up 28% at the Ameristar properties during the quarter. Leading the growth was East Chicago, Kansas City and Black Hawk. It's important to note that we are still in the early stages of growing this business and believe there is much opportunity in front of us. We completed the installation of our revenue management system at the Ameristar properties in June of last year and have seen four consecutive quarters of improved performance.

In the second quarter (inaudible) increased 8% led by East Chicago, Kansas City and Vicksburg and occupancy also grew 70 basis points showing both strong demand and improved hotel yielding. Our third revenue synergy initiative would transcend greater loyalty by introducing the mychoice program to Ameristar guests last year. We continued to see positive trends in both trip and spend with our top tiers growing 8% and 9% respectively. We have very good momentum with our loyalty program, really shows how our guest value the experiences we provide and the quality of the benefits we offer.

I'll now move into the area of market share and our continued focus on driving profitable revenue. Same store revenue growth resulted in 12 basis point increases in market share. Excluding Lake Charles, market share increased 135 basis points. In total, 9 out of the 13 properties saw market share increases during the quarter. These gains were achieved with marketing spend down 20 basis points as a percentage of GTR on a same store basis.

In closing, let me highlight two properties, starting first with L'Auberge Lake Charles. This property continues to perform well with the new competitor in the