Penn National Gaming Inc. (NASDAQ:PENN) Q1 2018 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 09:00 am ET

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Penn National Gaming Inc. (NASDAQ:PENN) Q1 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Penn National Gaming First Quarter Conference Call. [Operator Instructions]

I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Executive
Joseph N. Jaffoni

Thanks, Kelly, and good morning, everyone, and thank you for joining Penn National Gaming's 2018 first quarter conference call. We'll get to management's presentations and comments momentarily as well as your questions and answers. But first, I'll review the Safe Harbor disclosure.

In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements can be identified by the use of forward-looking terminologies such as expects, believes, estimates, projects, intends, plans, seeks, may, will, should or anticipates or the negative or other variations of these or similar words or by discussions of future events, strategies or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures and operating results. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations.

The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, can be found in today's press release, as well as on the company's website.

With that, I'll now turn the call over the company's CEO, Tim Wilmott. Tim?

Executive
Timothy J. Wilmott

Thank you, Joe, and good morning, everyone to Penn National's first quarter earnings call. Also speaking with me today will be our President and Chief Operating Officer, Jay Snowden, and our Chief Financial Officer, BJ Fair.

Let me begin by just talking a little bit about our first quarter results, despite some tough winter weather in the -- really in the first half of the first quarter in the Midwest and the Northeast. I'm very pleased to report that our operating team delivered outstanding results. In fact, adjusted EBITDA of $242.6 million for the first quarter, which was about 6.5% above last year and $9 million above our guidance of $233.6 million. I think a big part of it is driven by what we communicated in last October, our margin improvement plan, which delivered in the first quarter a 42-basis-point improvement over prior year. Jay is going to provide a little bit more color on that and where we are with that. And that is even with some accounting changes that actually had a dampening effect on margins in the first quarter of 2018 that BJ