Twin River Worldwide Holdings, Inc (NYSE:TRWH) Q4 2019 Earnings Conference Call - Final Transcript

Feb 11, 2020 • 08:00 am ET


Twin River Worldwide Holdings, Inc (NYSE:TRWH) Q4 2019 Earnings Conference Call - Final Transcript


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Stephen H. Capp

City. Regarding the pending acquisition of the Isle of Capri City, our current expectation is for regulatory approval in Missouri early in the second quarter. We're very bullish on the potential for this property as it fits our model for revenue upside given its best-in-market location and our plan for focused capex to dramatically improve the customer experience.

You'll recall that our purchase price for the combined Kansas City and Vicksburg assets is approximately $230 million, which represents a purchase multiple of approximately 8.5 times. That's actually a somewhat lower purchase multiple than we've achieved on our previous acquisitions. I'd like to point out that this Kansas City asset location is part of a city redevelopment zone that has experienced significant investment in recent years and is the site of new apartment complexes and loft conversions as well as new retail development. This is all occurring along the river adjacent to downtown Kansas City.

Our plan, as previously announced, is to invest approximately $40 million or so to transform the customer experience. We will do this, first, by placing a new outer skin on the existing boat. This new skin is a land-based translucent fabric secured by cables. It's relatively inexpensive and can take many forms. We intend that this new outer shell to the existing boat provide a pleasant arrival experience for our guest.

Second, we're going to build a 40,000 sq. ft. building adjacent to the boat, connecting the existing parking garage directly to the boat. That new square footage will enable us to locate most of the food and beverage off of the boat, freeing up space for a properly oriented table games pit and slot floor. The additional square footage will also accommodate additional retail outlets. We will reestablish this property in the table games market and drive revenue through efficient marketing initiatives and a vastly improved customer experience.

On to Vicksburg. At Vicksburg, similarly to Biloxi, Dover and Colorado, we will make minor modifications to the physical layout of the casino and food and beverage products. And our priority will be to drive higher revenue opportunity through an improved customer experience and implementation of efficient marketing programs. So, following the acquisition of both properties and $40 million capital investment into Kansas City, our total investment will be approximately $270 million. We expect to drive adjusted EBITDA at the two properties combined up to about the $42 million to $43 million level, resulting in an ultimate ownership multiple of, again less than 7 times.

On to 2020 earnings guidance. The year 2020 is going to be dynamic for Twin River. The addition of Black Hawk in January and the expected additions of Kansas City and Vicksburg in the second quarter will complement the annualization of financial results at Dover, and this will all be very helpful in more than offsetting the annualization of the competitive impact of Boston competition. In order to provide some clarity as to the summation of those various moving parts, we've decided