MGM Grand, Inc. (NYSE: MGG) today
reported an all-time Company high in quarterly net revenues and baccarat
volume. These records contributed to earnings for the fourth quarter ended
December 31, 1998 of 41 cents per diluted share, compared with 57 cents per
diluted share for the 1997 quarter. For the year ended December 31, 1998,
diluted earnings per share were $1.22 when compared with $1.89 for the year
ended December 31, 1997.
Net revenues for the 1998 fourth quarter reached a record high of
$214.9 million, compared with $212.6 million for the same period in 1997. The
increase in net revenues was a result of record baccarat volume at the MGM
Grand Las Vegas as well as increased hotel and food and beverage revenues due
to new amenities added to the flagship property in Las Vegas.
Operating cash flow (EBITDA) for the three months ended December 31, 1998
was $66.7 million, representing an operating margin of 31% when compared with
$72.6 million in the prior year`s fourth quarter.
“We are committed to extending our leadership as the premier entertainment
resorts in Las Vegas. We have dramatically expanded our properties,
established important marketing partnerships, embarked on an aggressive cost
containment program and significantly improved the depth of our management
team. The fourth quarter results provide a positive early indicator of the
merit of our strategic plan,” said Alex Yemenidjian, President and Chief
Operating Officer of MGM Grand, Inc.
“The transformation of our flagship property into The City of
Entertainment is nearing completion. We are now focused on closing the
Primadonna Resorts merger on March 1, 1999, and on the opening of our newest
casino property in Detroit in the third quarter. The Primadonna acquisition
and the new Detroit casino significantly expand the breadth of our operations
and diversify our revenue sources, while maintaining the strongest balance
sheet in the industry,” said J. Terrence Lanni, Chairman and Chief Executive
Officer of MGM Grand, Inc.
On December 7, 1998, the Company announced the signing of a definitive
merger agreement relating to MGM Grand`s acquisition of Primadonna Resorts,
Inc. Primadonna owns three hotel/casino resorts in Primm, Nevada, two
championship golf courses in nearby California and a 50% interest in New York
—New York Hotel/Casino in Las Vegas, Nevada. Primadonna`s shareholders will
receive 0.33 shares of MGM Grand common stock for each share of Primadonna
stock held, or a total of approximately 9.5 million shares of MGM Grand common
stock. Concurrently with the execution of the merger agreement, holders of
approximately 53% of Primadonna`s common stock delivered to MGM Grand
agreements to vote their Primadonna shares in favor of the merger. A meeting
of Primadonna`s shareholders is scheduled for February 23, 1999, to vote on
the merger. The transaction is subject to the satisfaction of various
conditions contained in the merger agreement, including approval of
Primadonna`s shareholders, obtaining the necessary regulatory approvals,
accuracy of representations and warranties and compliance with covenants. The
merger is expected to be completed on March 1, 1999.