Trump Hotels & Casino Resorts Posts Strong Fourth Quarter And Year-End Results

Trump Hotels & Casino Resorts, Inc. (THCR) (NYSE:DJT) today reported strong earnings and EBITDA for the fourth quarter and year ended December 31, 1998, exceeding Wall Street earnings estimates. Consolidated net revenues for the fourth quarter were $345.7 million, compared to $313.5 million reported for the same period in 1997. THCRÍs EBITDA (earnings before interest, taxes, depreciation, amortization and CRDA, state and municipal obligations) for the quarter was $51.6 million versus $38.2 million reported in the prior yearÍs fourth quarter. Net loss for the quarter (before one-time charges) was $15.2 million or $0.69 per share and exceeded Wall Street consensus estimates for the quarter which anticipated a net loss of $0.82 per share. After one-time charges including financing costs related to the Trump Marina refinancing, pre-opening costs for the Trump Indiana Hotel and costs associated with the cessation of development in jurisdictions in which THCR is no longer interested, net loss was $16.4 million, or $0.74 per share, compared to a net loss of $28.0 million, or $1.24 per share in the 1997 quarter. For the year ended December 31, 1998, consolidated net revenues were $1,403.6 million, compared to $1,399.4 million reported for the full year 1997. EBITDA for the year was $246.9 million versus $246.4 million reported for the prior year. Net loss for the year was $37.6 million or $1.69 per share before one-time charges. These results exceeded Wall Street consensus estimates for the year which anticipated a net loss of $1.84 per share. After these one-time charges, the net loss of $39.7 million, or $1.79 per share compared to a net loss of $42.1 million, or $1.85 per share in 1997.

Revenue growth was 10 percent for the quarter and constant for the year, and we had a number of one-time charges. Most importantly, we still had significant profit growth. The increase in profit resulted from a number of management strategies that were effectively implemented and reflects the successful implementation of our strategy of focusing on and growing profitable revenues. All of the following strategies meshed during the last six months of the year, effecting great results for the Company and setting the pace for 1999. For the six month period ending December 31, 1998, operating profit grew $20 million, or 17% at the properties, when compared to 1997. Accordingly, we believe these last six months of 1998 reflect how well the casinos are and will continue to perform.


First, we are seeing the direct benefits of our new advertising and marketing campaign, which highlight our core and unique strength: the Trump name, with its unmatched recognition. Importantly, we know our customers, their needs and how to efficiently meet those needs. And we are maximizing DonaldÍs name and our customersÍ appreciation of the unique Trump style to expand our base by bringing more of our existing customers, along with new customers, to our casinos .Second, we continued to benefit - and expect to continue benefiting - from the economies of scale we effected by centralizing certain operations and purchases for our three Atlantic City hotel casinos. Third, we continued to efficiently spend promotion dollars - qualitatively, as opposed to quantitatively - to drive the business. Our promotional allowances and gaming costs were lower as compared to last year, which resulted in improved operating margins at all of the properties, and our management team has excelled in fine tuning the operating assets for maximizing returns.


Finally, we will continue to focus on the debt and related reductions in interest expense as part of our overall cost savings strategy. Our goals are to continue increasing our profit margin.


Trump Taj Mahal reported net revenues for the fourth quarter of $139.7 million and EBITDA of $29.0 million, compared to net revenues for the 1997 fourth quarter of $130.2 million and EBITDA of $22.8 million. The operating margin at Trump Taj Mahal increased from 17.5% for the same period in 1997 to 20.7% for the fourth quarter of 1998. For the year ended December 31, 1998, Trump Taj Mahal reported net revenues of $566.4 million and EBITDA of $129.1 million, compared to net revenues for 1997 of $567.9 million and EBITDA of $127.0 million. For the full year, the operating margin at Trump Taj Mahal increased from 22.4% for 1997 to 22.8% for 1998.

ADVERTISEMENT


Trump Plaza reported net revenues of $99.5 million for the fourth quarter of 1998, compared with $94.8 million for the same period in 1997 and EBITDA of $13.6 million for the fourth quarter of 1998, versus $12.0 million reported for the 1997 fourth quarter. The operating margin at Trump Plaza increased from 12.6% to 13.7% for the fourth quarter of 1998. For the year ended December 31, 1998, Trump Plaza reported net revenues of $412.7 million compared to $414.3 million for all of 1997. EBITDA for the year ended December 31, 1998 was $72.6 million compared to $70.0 million for 1997. The operating margin at Trump Plaza increased from 16.9% in 1997 to 17.6% in 1998.


For the fourth quarter of 1998, Trump Marina posted net revenues of $68.8 million, compared to $61.5 million for the fourth quarter of 1997. EBITDA increased to $9.5 million for the 1998 quarter, compared to $4.5 million for the fourth quarter of 1997. The operating margin at Trump Marina increased from 7.4% in 1997 to 13.9% in 1998. For the full year, Trump Marina reported net revenues of $283.9 million, compared to $284.7 million for the year ended December 31, 1997. EBITDA increased to $45.6 million for the year ended December 31, 1998 compared to $40.0 million for the year ended December 31, 1997. For the full year, the operating margin at Trump Marina increased from 14.1% in 1997 to 16.1% in 1998.


Trump Indiana reported a strong fourth quarter, with net revenues of $37.7 million and EBITDA of $4.1 million, versus $26.9 million and $2.5 million, respectively, for the fourth quarter of 1997. For the full year ended December 31, 1998, Trump Indiana posted net revenues of $140.6 million and EBITDA of $16.5 million, compared to net revenues of $132.4 million and EBITDA of $23.1 million for 1997.


The fourth quarter opening of our first class Trump Hotel alongside the Trump Indiana Riverboat Casino was well-received. We posted increased casino patronage over the same quarter last year, which is directly attributable to the hotel and related marketing programs. With all 300 of the rooms and suites now available, and with the expected opening of our new garage during the fourth quarter of this year both customer visits and revenues will continue to increase and to be positively affected.


Trump Atlantic City Associates reported combined net revenues of Trump Plaza and Trump Taj Mahal for the 1998 fourth quarter of $239.2 million versus $225.1 million for the 1997 fourth quarter. EBITDA was $42.5 million, compared to EBITDA of $34.9 million and net loss for the 1998 fourth quarter was $9.9 million versus a loss of $17.4 million for the same period in 1997. For the full year ended December 31, 1998, Trump Atlantic City Associates reported combined net revenues of $979.1 million as compared with $982.3 million for the full year ended December 31, 1997. EBITDA was $201.7 million for 1998, compared to EBITDA of $197.0 million for 1997. Net loss for the year ended December 31, 1998 was $11.1 million, compared to $14.1 million at year-end 1997.


We are pleased with the operating results at each property and am confident that through continued efficient management and strategically increased advertising and marketing, the Company will easily meet or exceed its 1999 operating profit targets. At the same time, reducing our interest expense is a main priority this year, as reducing that expense will itself have a direct and very positive effect on the bottom line.


Finally, as was exemplified last week by our reaching a definitive agreement to acquire the Flamingo Hilton Riverboat Casino in Kansas City, Missouri, we are committed to expansion and will continue to evaluate selective new market opportunities across the country and internationally, to grow the business and maximize shareholder return. Trump Hotels & Casino Resorts, Inc. owns and operates Trump Plaza Hotel & Casino, Trump Taj Mahal Casino Resort and Trump Marina Hotel Casino in Atlantic City, NJ, as well as Trump Indiana, the riverboat casino at Buffington Harbor, IN, on Lake Michigan. It is the exclusive vehicle through which Trump will engage in new gaming activities in both emerging and established gaming jurisdictions in both the United States and abroad. (Tables to follow)


——-